Zcash (ZEC) Sinks Over 50% After "Infinite Mint" Bug Disclosure Spurs Supply-Cap Fears

BlockBeats reported that on June 5, privacy coin Zcash (ZEC) came under heavy selling after a newly disclosed security vulnerability raised concerns it could enable infinite minting. ZEC fell more than 50% in a single day. The disclosure quickly fueled debate across the crypto market, with several well-known investors and analysts questioning the outlook for the privacy-coin segment. While the Zcash development team said the probability of exploitation is extremely low, traders have focused on a bigger issue: whether the incident damages Zcash's core promise of a credible supply cap. During the latest ZEC rally, KOL Arthur Hayes, known for frequently sharing trading signals, said earlier today that he has sold his entire ZEC position due to the Orchard Pool vulnerability. Hayes said he initially underestimated the implications when he read about the issue yesterday, but ZEC's subsequent 30% drop prompted him to reassess and lock in full profits. He added that although he believes the chance of inflation is very low, it cannot be cryptographically proven impossible. Hayes said he will keep evaluating the situation and may reenter if his assumptions prove wrong, ideally at a lower price. Tyler Winklevoss, Gemini cofounder and head of Cypherpunk Technologies—described as the largest ZEC treasury—took a calmer view, saying software vulnerabilities are inevitable. He said software security is an endless race between good and evil in which defenders must stay at least one step ahead, and that AI has not changed the nature of that "cat-and-mouse" dynamic, only accelerated it. He added that every software project is in this race and said the Zcash team is among the best positioned to compete. As of May 13, 2026, Cypherpunk held 314,185.70 ZEC at an average cost of $337.86, equal to about 1.88% of Zcash's circulating supply. Ten days ago, the position showed an unrealized profit of $100 million; assuming no sales since then, the unrealized loss is now $11.89 million. ZEC's latest bull-market surge was initially catalyzed after prominent Silicon Valley angel investor Naval Ravikant wrote on X that "ZCash can be viewed as an alternative to Bitcoin." The post remains online, but Ravikant has not mentioned ZEC since.