In the context of a "return trend" in the privacy coin sector, Zcash (ZEC) has recently stood out with impressive performance—its price has skyrocketed over tenfold in the past few months, briefly surpassing $420, drawing rapid market attention to the driving factors behind it. However, the market is not entirely favorable: on-chain data shows increased whale activity, heightened leverage trading risks, and technical analysis warns of potential short-term corrections. Amid ongoing global macroeconomic uncertainties and increased volatility in crypto assets, ZEC's stellar performance is accompanied by dual signals of "high returns + high risks."

Recently, ZEC has experienced a remarkable surge. Since the beginning of October, its price has climbed from around $70 to over $420, achieving a sixfold increase in just a few weeks, making it one of the most prominent privacy coins in the crypto market.

Data shows that on October 31, ZEC's market capitalization first exceeded that of Monero (XMR) and Shiba Inu (SHIB). At that time, ZEC's market cap was $6.03 billion, while XMR's was $5.95 billion, and Shiba Inu's market cap was approximately $5.79 billion.

The reasons for this surge can be attributed to four main factors. First is the resurgence in demand for privacy coins. In the context of tightening global regulations and frequent data security incidents, market attention to the "optional privacy" feature has increased, and ZEC's unique shielded transaction function has gained popularity, with on-chain privacy transaction volumes significantly rising, further reinforcing its scarcity and unique positioning. According to ZecHub data, Zcash's Orchard privacy protocol's shielded supply has exceeded 4.1 million coins, maintaining zero-knowledge infrastructure while being backward compatible with earlier Sprout and Sapling protocols.

Second, the project team Electric Coin Company (ECC) recently released a roadmap for Q4 2025, announcing upgrades to the official ZEC wallet Zashi in four areas: generating one-time addresses for each transaction through the NEAR Intents protocol; automatically generating new transparent addresses after receiving funds; supporting Keystone hardware wallet resynchronization; and introducing Pay-to-Script-Hash multi-signature wallet support for Keystone devices. ECC stated that the quarterly focus is on reducing technical debt while enhancing user privacy and usability for Zashi, and the company will flexibly adjust execution strategies based on revenue and market changes.

Third, on-chain data indicates that large funds have been frequently building positions recently, with active leveraged long positions, and some funds recording significant unrealized gains in the short term, indicating that major funds are driving the market upward. Meanwhile, some short positions are showing unrealized losses, reflecting that bullish sentiment is dominating the market.

Finally, from a macro perspective, the recent volatility of Bitcoin (BTC) and Ethereum (ETH) has converged, indicating a shift in the market's "risk appetite." Some analysts believe that when the growth rates of Bitcoin and traditional safe-haven assets slow down and risk appetite rebounds, investors will turn their attention to altcoins with higher return potential.

Privacy coins are a type of cryptocurrency designed to enhance user transaction anonymity. Unlike the public transaction records of tokens like Bitcoin or Ethereum, privacy coins use cryptographic techniques to hide the sender, receiver addresses, and even transaction amounts, making on-chain fund flows difficult to trace. Common mechanisms include ring signatures, stealth addresses, and zero-knowledge proofs (zk-SNARKs).

There are two main paths to protect privacy: one is "default privacy," as seen in Monero, where every transaction automatically hides addresses and amounts; the other is "optional privacy," as in Zcash, which allows users to choose between transparent and shielded transactions, with shielded transactions using zero-knowledge proofs to hide key information. This way, users do not leave traditional "traces" that can be analyzed and tracked when transferring funds on-chain, enhancing asset fungibility and anonymity.

Recently, privacy coins have regained market attention for three reasons: first, as regulatory environments tighten and data breaches become more frequent, user demand for financial privacy has increased; second, technological upgrades are driving the maturity of privacy solutions, such as the continuous rise in Zcash's shielded supply, indicating increased on-chain adoption and enhancing market confidence in its intrinsic value.

Overall, privacy coins may no longer just be tools for "hiding asset flows," but are gradually being re-evaluated as "value assets" within more compliance and technology frameworks.

In addition to ZEC, there are several other tokens in the privacy coin space that also stand out in terms of technology and trading activity and are worth noting.

Monero (XMR)

First is XMR, which is widely regarded as the "standard" for privacy coins. Its transactions automatically enable privacy protection, employing mechanisms such as ring signatures, stealth addresses, and RingCT (hidden amounts), with traders unable to choose between public or hidden transactions. This feature makes it more popular among users or regions with strong privacy demands.

Firo (FIRO) Firo (formerly Zcoin) is a "newcomer" in the privacy coin space, utilizing the Lelantus Spark protocol and Dandelion++ network layer privacy protection mechanism, allowing for a "burn-and-redeem" method to break transaction history links, thereby enhancing anonymity. Its technical path and ecosystem development are quite advanced, and it remains at a relatively low market cap stage, making it attractive to risk-tolerant investors.

Beldex (BDX) Beldex is a more broadly positioned privacy ecosystem project that not only offers anonymous transactions but also extends to private communications, browsers, decentralized VPNs, and other privacy applications. Its technology includes RingCT, stealth address mechanisms, and masternode-driven features. From a sector perspective, Beldex's selling point lies in the idea that "privacy is not just about transactions, but about the overall digital interaction environment." If its ecosystem can further materialize, its value is seen as a complementary track in the direction of "privacy infrastructure."

Summary:

The active performance of ZEC and other privacy coins reflects the market's ongoing focus on transaction anonymity and privacy protection, as well as the increasing importance of privacy technology in the digital asset space. However, from on-chain fund flows, leverage usage, to short-term price volatility, the privacy coin market still presents high uncertainty. Investors should carefully assess potential risks while paying attention to sector developments and technological advancements, cautiously managing trading rhythms to avoid being swayed by short-term price fluctuations.

Related: Balancer allegedly attacked: $70 million in staked Ethereum (ETH) tokens transferred to a new wallet

Original article: “ZEC Soars Over 10x in Months: Why Are Privacy Coins Back in Investors' Spotlight?”

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