Crypto Market Selloff Continues: Ether Hits One-Year Low as Privacy Coin ZEC Halves in a Day After Vulnerability Disclosure
N.R. Finch
Ether fell over 8% to $1,625 Friday morning — a one-year low — while Zcash crashed more than 50% after a critical security flaw was disclosed, as crypto's longest losing streak since August shakes short-term investor confidence across digital assets.
How far did the majors fall?
Ether dropped over 8% to $1,625, its lowest since April 2025, before recovering to $1,677 at the time of writing.
Bitcoin slid 3.9% toward $61,000, then rebounded to $63,000 — closing in fast on the $60,000 psychological level.
Orbit Markets co-founder Caroline Mauron noted that $60,000 held as strong support in February and last appeared before Trump's election. A clean break below it would hurt.
Why can't this losing streak find a floor?
The trigger: Strategy announced its first small Bitcoin sale since 2022 on Monday — the market read it as a crack in institutional conviction.
At the same time, U.S. crypto ETFs keep bleeding outflows, and crypto has decoupled from record-setting tech stocks. This means → the old "tech up, crypto up" linkage is breaking down.
In plain terms = three things hit at once — a major holder selling, ETF outflows, and a tech-stock decoupling — and investors can't find a single reason to stay in.
Zcash halved in a day — what was the flaw?
Zcash founder Zooko Wilcox, along with Jason McGee and Taylor Hornby, disclosed on June 5 that the latest privacy layer — the Orchard pool — had a critical soundness bug allowing unlimited counterfeit ZEC to be created undetectably.
In plain terms = someone could secretly "print fake money" with no trace on the chain — for a coin built on privacy, that is the most lethal trust crisis imaginable.
The bug had already been patched via an emergency network upgrade, but once the full details went public, ZEC plunged over 50% to $251, its steepest single-day drop since May 2021.
AI helped find the bug?
In April 2026, Shielded Labs hired security engineer Taylor Hornby for ongoing protocol security research on Zcash.
On May 29, Taylor used Anthropic's Opus 4.8 model — released just the day before — alongside traditional methods to identify an under-constrained elliptic-curve multiplication flaw in the Orchard circuit's halo2_gadgets crate. This means → AI-assisted code auditing is becoming a live tool for catching deep protocol bugs, no longer just a lab experiment.
This reflects a broader shift: crypto security audits are moving from pure human review to an "AI + human" hybrid model — discovery is faster, but the market shock after disclosure is also sharper.
How did the big players react?
BitMEX co-founder Arthur Hayes posted that he had sold his entire ZEC position — after reading the vulnerability details and seeing a 30% pullback, he chose to close out entirely.
He added that he would keep reassessing, and would consider re-entering at a lower price if his thesis proves wrong.
This means → even a crypto veteran chose to step aside first and watch later. For the privacy-coin sector, the trust-repair challenge in the near term is far larger than the price-repair challenge.
Content is for reference only, not financial advice.