In the second half of 2025, privacy coins suddenly became the market pioneers, while the rest of cryptocurrencies evolve through ETF flows, base trading, and macro beta. Zcash’s resurgence, aided by wallets that make privacy the default and a power shift against longtime rival Monero, suggests the industry may have come full circle: from the cypherpunk ideals of untraceable, permissionless cash to a monitored, ETF-soaked market, back to “digital money” that resists traceability.
CoinDesk Research’s in-depth study on Zcash frames the pivot: shield adoption has climbed to about a fifth of supply; more than 30% of transactions now affect the protected pool; and Zashi, a proprietary wallet, makes private transfers the default and applies a “pre-spend shield.” The effect is an expanding set of anonymity and a user experience that no longer treats privacy as an advanced parameter, but as the baseline for how money should flow.
Markets signal a change in sentiment
Price action tells its own story: zcash is up about 741% since September 28, while monero has increased about 54% since August. Even long-dormant names like And the first two privacy-focused projects dating from 2017 and 2014, have increased by 145% and 337% respectively in recent weeks.
What makes this move remarkable is that it occurs against a bleak macroeconomic backdrop. Bitcoin and ether have fallen to multi-month lows as traders abandon risk and return to a stronger U.S. dollar. The inverse correlation has given a symbolic advantage to the evolution of privacy tokens: investors appear to be buying privacy, not yield.
From institutions to individuals
It’s a striking reversal for a market that has spent the past two years celebrating the arrival of ETFs, custodians and corporate compliance offices. Privacy coins are now thriving precisely because they represent the opposite of this trend: tools for individuals, not institutions.
For early cypherpunks, privacy wasn’t a marketing gimmick. It was the foundation of financial freedom. More than a decade later, the call comes back for a different reason. In a world of AI-enhanced surveillance and constant data collection, anonymity is being redefined not as a secret, but as self-protection.
The return of Zcash reflects this 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 no longer requires compromise. Transactions settle in seconds, protected balances sync quickly, and compliance features like key display allow users to selectively share data. This is privacy by default, not a loophole.
The cautionary tale of Tornado Cash
That doesn’t mean regulators are looking the other way. The lawsuits filed against the developers of Tornado Cash are 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 transfer business, but failed to convict him of the most serious money laundering charges. In the Netherlands, developer Alexey Pertsev is serving a five-year sentence on related charges.
However, the winds could turn. In March, the U.S. Treasury quietly removed Tornado Cash from its sanctions list, recognizing that the case raised difficult questions about code, discourse and accountability. It was a tacit admission that the blunt instrument of sanctions may not be suited to 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 transparency option. This architectural difference makes general prohibitions much more difficult to enforce.
Traders are rediscovering “digital cash”
Bitcoin served as proof that money can exist without banks, privacy coins now prove that it can exist without surveillance. Recent trade flows show that capital is migrating towards assets that operate more like cash, immediate, permissionless and difficult to track.
Zcash and Monero are leading this shift for one clear reason: they are used, not just traded. On-chain data shows that Zcash’s protected pool, where senders, recipients and amounts are encrypted, has grown to hold around 25-30% of the circulating supply, its largest share since the network’s launch.
Analysts at CoinDesk Research say that more than a third of transactions now touch this private layer, evidence that users are actively moving coins to encrypted channels rather than keeping them visible on public ledgers.
Crypto comes full circle
The rally in privacy coins may be less about speculation and more about identity. Bitcoin showed that money could flow without borders; Ethereum proved that finance could function without intermediaries; Zcash reminds markets that financial privacy remains important.
After years of institutional packaging, derivatives, and ETFs, the pendulum is swinging back toward the ideals that started the industry in the first place: individual freedom and the right to trade without oversight.
Whether or not regulators will allow this shift to continue unsupervised remains to be seen, but the market is clear in its belief: the best-performing crypto assets of 2025 are those that resemble cash, and this trend is expected to continue.
