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Privacy Coins: Pump or Paradigm Shift?Zcash. Monero. Dash. Remember those? Suddenly, they... Privacy Coins: Pump or Paradigm Shift?
Zcash. Monero. Dash. Remember those? Suddenly, they're not just relics of the 2017 ICO boom. Zcash (ZEC) is up over 700% since September 2025, hitting $430. Monero's climbed over 130% this year, and Dash is up a staggering 400%. Bitcoin, meanwhile, is… well, Bitcoin. So, what’s going on?
The narrative, pushed by the likes of Galaxy Digital, is a user-driven shift towards privacy. Why Zcash price is up 700% since September, according to Galaxy Digital - dlnews.com New user tools, they say, are making private transactions easier. And it's true: the Zashi wallet has simplified things. Plus, we're seeing cross-chain integrations, letting users bounce funds between transparent and private networks.
But let's dig into the numbers. Over 30% of the Zcash supply is now stashed away in private pools—an all-time high. That sounds impressive. But what is the actual volume moving through those pools on a daily basis? Are we talking about genuine, sustained usage, or just a few whales moving coins around to create the illusion of activity? (That's a question few seem to be asking.)
Lyn Alden, for one, isn’t buying it. She calls it "a coordinated token pump." Naval Ravikant, on the other hand, believes Zcash represents the future of money, suggesting transparent crypto won't survive government crackdowns. Andreessen Horowitz is touting record user metrics for Zcash and Railgun, claiming the demand for privacy is more urgent than ever.
Who’s right?
The key, as always, lies in understanding the context. Zcash was born from a Bitcoin fork in 2016, conceived by Zooko Wilcox to address the privacy shortcomings Satoshi himself acknowledged. It uses zk-SNARKs, a zero-knowledge proof system, to validate transactions without revealing the sender or receiver. Pretty cool tech, honestly.
But that tech has a target on its back. The European Parliament voted in 2024 to ban listing privacy tokens like Zcash and Monero on EU exchanges, with implementation expected in 2027. Crypto exchanges like Kraken and Binance have already delisted or considered delisting these coins in the EU. The legal hammer is coming down.
And here’s where I start to get skeptical. The timing of this price surge is… interesting. Are people genuinely flocking to privacy coins because they're suddenly easier to use? Or are they anticipating a crackdown and trying to front-run it? (Occam's razor suggests the latter.)
The Regulatory Squeeze
The legal pressure on privacy-focused crypto is only intensifying. Look at what happened with Tornado Cash. Co-founder Alexey Pertsev was convicted of money laundering in the Netherlands in 2024. Roman Storm, another co-founder, was convicted in the US in August 2024 of conspiracy to operate an unlicensed money-transmitting business. These aren't just isolated incidents; they're a clear signal. (Though, admittedly, the US Department of Justice intends to reject similar cases going forward.)
The conviction of Storm is particularly telling. It demonstrates a willingness by regulators to go after the developers of privacy-enhancing tools, not just the users. That sends a chilling message to anyone building similar tech.
This is the part of the report that I find genuinely puzzling. If regulators are so intent on crushing privacy coins, why are we seeing this sudden surge in interest? Is it a last-ditch effort to use these tools before they become completely unusable? Is it wishful thinking on the part of investors who believe privacy will ultimately prevail? Or is it, as Alden suggests, a coordinated pump designed to enrich a few insiders before the music stops?
Frankly, the data doesn't give us a definitive answer. We need to see sustained transaction volume in those private pools, not just a one-time spike. We need to see genuine adoption by users who value privacy, not just speculation by traders looking for a quick buck.
And we need to see how regulators respond. Will they continue to pursue developers of privacy-enhancing tools? Will they succeed in delisting these coins from exchanges? Will they find new ways to track and trace private transactions?
The answers to those questions will determine whether this price surge is a genuine paradigm shift or just a temporary blip.