Cryptocurrencies focused on privacy have come onto investors’ radar recently, ranking among the most popular token categories.
According to CoinGecko, which tracks a combined market capitalization of almost $22 billion across privacy coins, their value rose 52.2% in the past 24 hours. Rival data aggregator CoinMarketCap places the category at nearly $55 billion, with Zcash (ZEC) now leading the pack.
One of the early privacy-focused cryptocurrencies, Zcash launched in October 2016. It traded below $80 at the start of this October but exploded 375% over the month to reach $380 by Halloween, flipping Monero (XMR) as the largest privacy token by market cap.
Governments have weighed measures like the European Union’s “Chat Control” proposal that could force scanning of encrypted messages, while Meta has resumed training AI models on European user data. As concern over data surveillance grows, privacy technologies are back in focus.
Zcash’s big month and the rise of shielded supply
Zcash and other privacy tokens surged even as the broader cryptocurrency market struggles to recover from US President Donald Trump’s early October tariff threats against China and a $19-billion liquidation event.
But the privacy trend isn’t just based on speculation. It coincides with a rise in Zcash’s “shielded supply” and a wave of adoption driven by new wallet technology that made private transactions more accessible.
“The focus is shifting toward projects that aren’t launching tokens just for the sake of it, but are building privacy technologies like zero-knowledge systems powered by real incentives. These systems can provide privacy by default without requiring users to make explicit choices about anonymity,” Carter Feldman, founder and CEO of ZK-proof-based blockchain Psy Protocol, told Cointelegraph.
At the heart of Zcash’s privacy model is the shielded address, which uses zero-knowledge proofs (specifically zk-SNARKs) to conceal the sender, receiver and transaction amount. Transactions sent between shielded addresses enter a pool for coins transacted privately. As that pool grows, the network’s anonymity set expands, strengthening the privacy guarantees for everyone using it.
That shielded pool is now the largest it has ever been, closing in on 4.9 million ZEC.
Zcash developer Electric Coin Company rolled out new features in its Zashi wallet to kick off October, allowing users to perform cross-chain swaps and private payments through an integration with Nеаr’s Intents system. This means users could easily move value into and out of Zcash’s privacy layer, without going through centralized exchanges or complicated bridging interfaces.
Related: What if quantum computers already broke Bitcoin?
This newfound ease of use helped drive the expansion of the shielded pool throughout October. Zcash activity on Near Intents exploded at the start of October, including over $17 million on Oct. 16 alone.
However, the boom comes with caveats. Investigator ZachXBT pointed out that Zashi’s integration with Near Intents might not fully obscure transaction paths, suggesting that crosschain privacy still has traceable links.
“I contacted the Zashi team and they informed me they plan to solve this privacy issue by adding ephemeral addresses soon and eventually shielded Near Intent refunds,” ZachXBT said.
Zcash is surging behind global privacy trends
Globally, privacy is at the center of policy and tech debates as governments introduce controversial surveillance proposals, while companies push deeper into data-gobbling AI models.
“Regulatory scrutiny has paradoxically clarified the value proposition for compliant privacy solutions,” Marko Stokić, head of AI at Oasis Protocol, told Cointelegraph.
“The industry is working through how to implement privacy in ways that serve legitimate user needs while remaining accountable. This has driven demand for programmable privacy, where information can be protected by default but revealed when legally required or contextually appropriate,” he added.
Related: EU Chat Control hinges on Germany’s decision
In Europe, EU lawmakers have backed away, at least for now, from the controversial “Chat Control” proposal that would have forced messaging services to scan encrypted chats for illegal material. Meanwhile, Meta began training its generative AI models using European users’ Facebook and Instagram data, but promised that private messages would not be included.
Across the Atlantic, privacy rules in the US remain a patchwork. States such as California, Colorado and Virginia have strengthened their protections, while efforts in Congress to pass a nationwide law remain stalled.
These global trends have intensified both fear and fascination with digital privacy. As governments weigh invasive tools to monitor online behavior and companies harvest more data, privacy technologies are being reimagined as market opportunities.
“The biggest misconception is conflating privacy with criminality or assuming compliance and privacy are mutually exclusive. Well-designed systems can protect sensitive information during normal operations while remaining auditable when necessary,” Stokić said.
Why privacy matters more to crypto users now than ever before
Anonymity once belonged to cypherpunks and traders who distrusted regulators.
“Privacy isn’t some niche feature for people with something to hide,” Feldman said.
“The real misconception is that we have to choose between privacy and usability, or between privacy and scale. The technology has advanced to the point where we can have both.”
Today, crypto operates under constant surveillance under Know Your Customer checks, exchange monitoring and advanced blockchain analytics.
Blockchain forensics specialists use machine learning to track wallets and build behavioral profiles. Their systems can link identities, map connections between wallets and predict when assets will move to exchanges.
Governments are also tightening control. On Aug. 18, the US Department of the Treasury requested public input on AI, blockchain monitoring, digital identity credentials and “privacy-enhancing tools” to detect illicit activity involving digital assets. The agency said the feedback will inform new guidance and potential rulemakings under the GENIUS Act.
In the EU, crypto exchanges must treat transfers to or from self-hosted wallets as higher-risk and apply enhanced due diligence, including verifying wallet control. These obligations entered into force on Dec. 30, 2024.
For many users, that mix of surveillance and scrutiny is a signal to look to privacy-focused cryptocurrencies.
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