Privacy-focused cryptocurrencies have sharply outperformed a broader digital-asset market that remains below bitcoin’s October 2025 peak. Glassnode sector data showed privacy coins rising 213% since bitcoin set a record above $126,000 on Oct. 6, 2025, with the group also gaining 90% in the most recent month covered by the report.

Over the past year, the sector’s combined market value expanded from $7.1 billion to $33.6 billion. The move has been led by zcash, while monero has also posted solid gains, pointing to a broader rotation into privacy assets rather than a single-token spike.

Zcash becomes the main driver

In Glassnode’s Sept. 7 snapshot, zcash represented about 62% of the privacy-coin sector’s total value after posting the strongest performance in the group. Over the prior year, ZEC rose by more than 25 times, and its market-cap ranking climbed from 82nd place to seventh.

The token traded above $1,000 in early September. The rally was accompanied by leveraged short liquidations and inflows into exchange-traded products, adding momentum as the sector pulled away from the rest of the crypto market.

Institutional access expands through Grayscale product

A key change for zcash came on Aug. 25, when Grayscale converted its trust into an exchange-traded product listed on NYSE Arca. The vehicle gives investors spot exposure to ZEC through brokerage accounts without requiring them to hold the token directly.

According to a Sept. 8 SEC filing, Grayscale allocated roughly $100 million of ZCSH shares in exchange for ZEC. The product reached more than $500 million in assets within two weeks of launch, alongside over $70 million in inflows. The fund is not registered under the Investment Company Act of 1940.

Monero rises on a different path

The privacy rally has not been limited to zcash. Excluding ZEC, Glassnode’s privacy basket still gained about 85% over the past year, while monero roughly doubled in value.

XMR had already surpassed its previous price record in January, establishing strength before zcash’s more recent surge accelerated the sector higher. The two networks, however, offer privacy in different ways and face different trade-offs in market access and compliance.

Privacy features and regulatory trade-offs

Zcash combines transparent transactions with an optional shielded pool that uses zero-knowledge proofs to hide senders, recipients, and amounts. It also includes viewing keys that can be used to disclose selected transaction data to auditors, counterparties, or regulators. Grayscale has argued that stronger prices improve Zcash network economics, estimating that mining rewards are about twice bitcoin’s daily rewards per machine under its assumptions.

Monero, by contrast, obscures transaction details at the protocol level by default. It uses ring signatures, stealth addresses, and confidential transactions to conceal the sender, recipient, and transferred amount. That design can complicate compliance monitoring for exchanges, and several major centralized platforms have delisted the asset.

Usage persists as policy risk remains

Despite exchange restrictions, underlying Monero activity has not disappeared. TRM Labs found that Monero transaction volumes in 2024 and 2025 stayed significantly above levels seen in early 2020 and 2021, suggesting continued use even as access narrowed on some trading venues.

The next confirmed pressure point for the sector is regulatory. EU anti-money-laundering rules are scheduled to bar crypto-asset service providers from maintaining anonymizing accounts or stronger obfuscation features, including anonymity-enhancing coins, starting on July 10, 2027. That leaves privacy coins balancing rising demand and institutional access against a still-material policy risk.

Source: news.bitcoin.com