Privacy Coins Jumped 288% in 2025 While Everything Else Fell – What’s Next?

While the wider crypto market mostly stayed put in 2025, privacy coins quietly had gains that beat everything else. This area rose 288% last year, compared to exchange tokens at 22%. That’s a big difference.

Monero hit a new high of $797 on January 14, 2026, its first since 2018. That’s right, a coin that many exchanges got rid of in recent years hit a new high, while Bitcoin struggled to stay above $68,000.

Zcash wasn’t far behind. It jumped over 1,000% from its lows, hitting $744 in November 2025 before going down again. Dash surprised many with a 135% rise in one week in January 2026. On average, assets focused on privacy did better than almost every other crypto type.

Crypto researcher Stacy Muur mentioned that the total market value for privacy coins was over $24 billion in early 2026. That’s bigger than many individual Layer 1 blockchains.

Several things happened. Rules on public blockchains got stricter throughout 2025 and into 2026. The US GENIUS Act, signed in July 2025, made stablecoin rules tougher. The EU’s MiCA rules brought in more compliance needs. Dubai’s regulator banned privacy tokens starting January 12, 2026. The EU plans even tougher steps by 2027.

It’s interesting that tougher rules didn’t kill demand; they made it stronger. As blockchain tracking went up and KYC needs got tighter on chains like Ethereum and Solana, money went into assets made to stop this tracking.

Tornado Cash, a tool for making transactions anonymous, saw its active user count go up to 3,900 per month by December 2025, a steady rise all year. This shows people were actively trying to find ways to keep their transactions private.

There have also been more real-world attacks on crypto holders as on-chain wealth gets easier to trace. If your wallet balance is public, you become a target. This risk is pushing people toward privacy because they have to, not just because of what they believe.

Monero is now the top privacy coin. Every transaction on its network is private by default. The sender, receiver, and amount are always hidden using ring signatures, stealth addresses, and RingCT. There’s no way to turn privacy off.

This design made Monero unpopular with regulated exchanges. Binance, Kraken, and others took XMR off their lists because of regulatory pressure. Most thought this would be the end.

Instead, trading went to decentralized exchanges, peer-to-peer platforms, and atomic swap services. GhostSwap alone handled over $750 million in BTC/XMR swaps during 2026. When Hyperliquid launched XMR perpetual swaps on January 15, 2026, XMR rose 6%, and volume went up over 13% in one day. The market found its own way to provide liquidity.

Monero is also improving its core technology. The planned FCMP++ upgrade will replace ring signatures with full-chain membership proofs, making transactions even harder to trace. A new idea called Grease is bringing payment channels to Monero, similar to the Lightning Network but private by default.

Currently around $335, XMR is about 57% below its January high. Some see this as a chance to buy. Others see it as a warning about the risks of assets that are sensitive to rules.

Zcash takes a different approach. Privacy is optional. Users can pick between transparent transactions (like Bitcoin) and shielded transactions that hide everything using zk-SNARKs, a type of zero-knowledge proof.

This made Zcash more acceptable to institutions and regulators. In January 2026, the SEC finished a review that started in 2023 and decided not to take action against Zcash. This was a good sign in a market where regulatory clarity is rare.

Still, Zcash also had problems inside the company. The Electric Coin Company team, the original developers, left to start a new company because they disagreed with the Zcash Foundation’s board. Losing the founding team is a worry for a project that needs active development.

Even with the drama, Zcash’s shielded pool has been growing. The removal of the Founder’s Tax in 2020, which used to send 20% of newly mined ZEC to founders and investors, keeps reducing sell pressure.

Zcash is now trading around $300, below its November 2025 high of $744. The governance situation makes things uncertain, but if privacy is allowed in regulated markets, Zcash’s selective disclosure model, where users can share transaction details with auditors while remaining private otherwise, gives it a good chance of being accepted.

Dash focuses on being easy to use rather than having maximum privacy. Its PrivateSend feature uses CoinJoin mixing for basic privacy, and InstantSend confirms transactions in under two seconds. It’s not as private as Monero but works for everyday use.

Dash rose by 400% during October and November 2025 and added another 90% in early 2026. Money went into Dash partly because of Zcash’s governance problems, as traders looked for other options.

Besides the main privacy coins, a newer type is growing fast. Privacy blockchains like Oasis Network and Secret Network offer smart contract platforms with privacy built in. These aren’t just for payments; they allow private DeFi, encrypted NFTs, and private voting in DAOs. According to CoinGecko, the market share of privacy blockchains grew from 3.4% of the crypto privacy market in 2021 to 47.7% by early 2024.

Here’s the funny thing: Every time regulators crack down on privacy coins by taking them off lists, banning them, and making KYC stricter, the idea gets stronger. The more governments push for financial tracking, the more valuable privacy tools become.

Venture capital firm a16z talked about this in their 2026 outlook, saying that secrets-as-a-service would become a big trend in crypto. Privacy needs to be a key part of internet infrastructure, built into the base, rather than added later.

Chainlink and other oracle networks are seeing how zero-knowledge proofs can check information without showing it. XRP and institutional payment networks are studying selective disclosure models. Privacy is becoming important infrastructure for the crypto world.

There are downsides. Privacy coins face risks because they’re linked to illegal things. Monero is a main currency on some darknet marketplaces. Japanese authorities arrested 18 people for laundering money through XMR in 2024. A US nuclear engineer tried to sell secrets for Monero. These stories make it harder for privacy coins to be accepted.

Privacy coins are different from Bitcoin or Ethereum. They have less liquidity and more volatility. Regulatory news can quickly change prices by 20%. Access to exchanges is limited and getting more limited in some places.

Monero fell from $797 to around $335 in about a month, a 57% drop. Zcash went from $744 to $300. These are big drops. Anyone focusing only on the 288% annual gain from 2025 without knowing the risks is missing part of the story.

This area has a key question: Can regulators stop liquidity faster than technology can redirect it? So far, technology is winning. Atomic swaps, permissionless launches, and decentralized exchanges keep providing access. Still, enforcement tools are getting better, and the situation keeps changing.

If you’re watching the privacy trend, watch these things. Monero’s FCMP++ upgrade timeline will show if the project can keep improving its technology without support from a company. Zcash’s developer situation, whether new teams replace the ECC, will decide if the project stays important. The wider regulatory environment, especially the EU’s 2027 timeline for stricter rules, will set the tone for the future.

The 288% gain from 2025 happened because the market didn’t value the demand for privacy enough. Whether this keeps happening depends on bigger things than any single coin.

Watching top cryptocurrencies and DeFi tokens like Hyperliquid, which launched the XMR perps, can give clues about changes in how much risk people are willing to take.

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