Time for anonymity? There has been little talk of the privacy altcoins Monero (XMR) and Zcash (ZEC) recently, but they have quietly gained momentum over the week. What accounts for this renewed interest and will it continue?
Monero and Zcash jump on the week
Most of the “big” crypto-currencies have seen very measured gains over the past week. Bitcoin (BTC) posted a meagre +0.4%, Ether (ETH) was at the same point with +0.7%, and Binance’s BNB even fell by -1.8%.
But against this, the anonymous altcoins Monero and Zcash seem to be in notable form. Over the last seven days, XMR has risen by 19%. The ZEC jumped even more sharply, rising by +49.5% over the same period:
ZEC up nearly +50% on the week
This pushes the capitalizations of both cryptocurrencies back into the top 100, with Zcash now sitting in 62nd place, with a capitalization of $1.8 billion and Monero is 38th, with $3.3 billion.
According to data published by Cryptoslate, the trend is also observable among all the privacy coins. Their combined market cap has grown by 12.9% over the last seven days.
How to explain these increases
The crypto community being particularly fickle, anonymity altcoins were not particularly headline news in recent months, and their prices had tended to fall. How then can we explain this renewed interest in Zcash and Monero?
One can only speculate, of course, but it is likely that the traceability of “classic” crypto-currencies has come under particular scrutiny in recent weeks. Economic sanctions against Russia have been discussed, and with it the idea that cryptocurrencies are globally too traceable to be used by Putin. The attraction of ZEC and XMR is therefore perhaps a reaction to this awareness of the transparency of major blockchains.
I really think Privacy coins are due a pump in 2022. All this Russia stuff will also push it further on. A coin that can store value privately will be very valuable in uncertain times.
– Kamal (@eth_kamal) March 12, 2022
We can also mention the continued attention of regulators, who are keeping a closer eye on crypto-assets at the moment. Today, the MiCA regulation is expected to be voted on at the European level, and the supervision of the mining sector is a concern, while it is still unclear how the new rule could be enforced.
The situation in Ukraine has also shown how easy it is to block funds on centralised platforms. This was proven by Coinbase, which just last week blocked 25,000 Russian-owned addresses.
Although the crypto community has overwhelmingly supported Ukraine, it is concerned about the fallout from the situation on the ecosystem as a whole. Indeed, several politicians have taken advantage of the concerns to push for stricter regulation of cryptocurrencies, even though Putin has shown no signs of using them.
Could anonymity altcoins then progress, and attract new investors? That remains to be seen, but this week tends to indicate that they are of interest, at least to a fraction of the crypto community.
