Market Bloodbath Drags Altcoin Cap Below $1 Trillion
The mayhem that characterized the cryptocurrency market on Friday saw several high-cap altcoins log double-digit losses, resulting in the aggregate market capitalization of altcoins dipping well below the $1 trillion mark. Ethereum ( ETH) led altcoins down after it plunged from just over $1,700 to an intraday low of $1,545, a level last seen in April 2025. The digital asset’s 10% slide in 24 hours dragged its market capitalization under $200 billion.
At the time of writing (2:45 p.m. EST), ETH’s seven-day losses stood at nearly 22%, while its year-to-date gains were approaching 50%. The number two digital asset’s price performance saw over $468 million in leveraged positions erased, with long bets accounting for 87%, or $408 million, of the total. ETH’s slide in recent weeks left leading Ethereum treasury company Bitmine with an unrealized loss of $10.3 billion.
Other high-cap altcoins like BNB, XRP, and SOL also saw red, but their losses were all under 10%. This was the case with several other altcoins as well.
However, unlike in recent days, where a few tokens appeared to trend against the market, the cryptocurrency market’s June 5 sell-off saw nearly all altcoins register losses. HYPE, which tapped a new all-time high of $75.48 on June 2, tumbled 14% to $57.12. Meanwhile, LAB, which also reached a new high of $27.30 on June 2 amid a tumbling market, was down a whopping 23% in 24 hours but up 89% over seven days.
ZEC was perhaps the biggest loser among recent high-flying tokens, tumbling from just under $540 to an intraday low of $264.80—a decrease of over 40% in 24 hours. Unlike its peers, however, ZEC’s slide was linked to the revelation of a vulnerability in the Orchard shielded pool, which had been present since 2022. According to security expert Taylor Hornby, the vulnerability enabled the counterfeiting of ZEC tokens.
Although ZODL swiftly deployed an emergency soft fork to patch the exploit, the revelation that a critical vulnerability had lurked undetected for four years—only to be unearthed by AI tools—sent shockwaves through the community. The news triggered a wave of market panic, prompting high-profile figures like BitMEX co-founder Arthur Hayes, long one of ZEC’s most vocal cheerleaders, to liquidate his position.
The Privacy Debate: ZK-Proofs vs. FHE
Some observers posited that the incident demonstrates the limits of zero-knowledge (ZK) proofs that anchor the Zcash protocol. Guy Zyskind, a blockchain privacy pioneer and founder of Fhenix, argues the revelation should bring into focus the benefits of alternative encryption technologies like fully homomorphic encryption (FHE).
“One of the nice properties of FHE compared to Zcash/ZK is that you can actually compute in the encrypted domain. This means that you could, in theory, encrypt the sum total of everyone’s coin balances and ensure that it doesn’t grow or inflate given some bug in the software. With ZK, you either reveal that to everyone or you hide it. Zcash chose the latter for extra privacy at the cost of users not being able to trust that the total supply remains sound,” Zyskind said.
While ZEC later rebounded to trade around $320, the coin’s spectacular plunge trimmed its market capitalization from approximately $9 billion to $5.37 billion. In the process, it relinquished its position as the number one privacy coin to Monero.
Meanwhile, at the time of writing, the altcoin market capitalization had dropped to $880 billion and appeared on course to match levels last seen in early February.
