In the second half of 2025, privacy coins have suddenly become the market pacesetters while the rest of the cryptocurrencies advance through ETF flows, basis trading, and macro beta. Zcash’s resurgence, aided by wallets that make privacy the default and a power shift against its former rival Monero, suggests the industry may have come full circle: from cypherpunk ideals of permissionless, untraceable cash to a surveilled, ETF-soaked market, back to “digital cash” that resists traceability.
CoinDesk Research’s deep dive into Zcash frames the pivot: Protected adoption has risen to about a fifth of supply; more than 30% of transactions now touch the protected fund; and Zashi, a wallet of its own, makes private transfers the default and applies “protection before you spend.” The effect is an expanding set of anonymity and a user experience that no longer treats privacy as an advanced setting, but as the basis for how money should move.
Markets signal a change in sentiment
Price action tells its own story: zcash is up approximately 741% since September 28, while monero it has increased about 54% since August. Even long-dormant names like and both initial privacy-oriented projects dating back to 2017 and 2014, have rallied 145% and 337% respectively in recent weeks.
What makes this move notable is that it comes against a bleak macroeconomic backdrop. bitcoin and ether have fallen to multi-month lows as traders exit risk and return to a stronger US dollar. The inverse correlation has given the privacy coin movement a symbolic advantage: Investors appear to be buying privacy, not performance.
From institutions to individuals
It’s a surprising change for a market that spent the last two years celebrating the arrival of ETFs, custodians and corporate compliance offices. Privacy coins are now thriving precisely because they represent the opposite of that trend: tools for individuals, not institutions.
For early cypherpunks, privacy was not a marketing gimmick. It was the basis of financial freedom. More than a decade later, the appeal returns for a different reason. In a world of AI-enhanced surveillance and constant data collection, anonymity is being reframed not as secrecy, but as self-protection.
Zcash’s return reflects that change in sentiment. Network technology, based on zero-knowledge proofs that allow users to verify transactions without revealing them, has matured to the point where privacy requires no compromise. Transactions settle in seconds, protected balances are quickly synchronized, and compliance features such as key viewing allow users to selectively share data. It’s privacy by default, not a loophole.
Tornado Cash’s Warning
That doesn’t mean regulators are looking the other way. The prosecution of Tornado Cash developers remains a reminder that privacy still lives in a legal gray area. In August, a New York jury found co-founder Roman Storm guilty of running an unlicensed money transmission business, although it failed to find him guilty of the most serious money laundering charges. In the Netherlands, real estate developer Alexey Pertsev is serving a five-year sentence for similar reasons.
However, the winds may be changing. In March, the US Treasury quietly removed Tornado Cash from its sanctions list, acknowledging that the case raised difficult questions about code, speech and liability. It was a tacit admission that the blunt instrument of sanctions may not be suitable for decentralized software.
The contrast with Zcash is instructive. Tornado was a mixer, a smart contract that pooled and redistributed funds, while Zcash is a complete blockchain with built-in privacy and a transparency option. That architectural difference makes blanket bans much more difficult to enforce.
Merchants rediscover “digital cash”
Bitcoin acted as proof that money can exist without banks, privacy coins are now proving that it can exist without surveillance. Recent trade flows show capital migrating towards assets that function more like cash, immediate, permissionless and difficult to track.
Zcash and Monero are leading that change for a clear reason: they are used, not just traded. On-chain data shows that Zcash’s protected pool, where senders, receivers and amounts are encrypted, has grown to contain approximately 25% to 30% of the circulating supply, its largest share since the network’s launch.
Analysts at CoinDesk Research say more than a third of transactions now touch that private layer, evidence that users are actively moving coins into encrypted channels rather than keeping them visible on public ledgers.
Cryptocurrencies come full circle
The rally in privacy coins may have less to do with speculation than identity. Bitcoin showed that money could move without borders; Ethereum showed that finance can work without intermediaries; Zcash reminds markets that financial privacy is still important.
After years of institutional bundling, derivatives and ETFs, the pendulum is swinging back to the ideals that launched the industry in the first place: individual freedom and the right to trade without supervision.
Whether or not regulators will allow this shift to continue unchecked remains to be seen, but the market has one clear conviction: the best-performing crypto assets of 2025 are those that look like cash, and that trend looks set to continue.
