Monero Gains, Zcash Struggles In Privacy Coin Shake-up

Monero (XMR) gained more than 23 % this week, while Zcash (ZEC) dropped by nearly 25 %. Such a gap highlights the high volatility of the privacy coins market, in a context of low activity related to Thanksgiving. This divergence between two key privacy assets raises questions about the internal dynamics of the sector.

Monero Rises Sharply

While the entire privacy coins sector fell by nearly 40 % this week, Monero stands out as an exception. The crypto XMR rose by more than 23 %, a surge that intrigues in an otherwise bleak context.

This increase appears largely fueled by futures markets. The cumulative bid-ask volume delta on futures remains positive, while that of the spot remains stable. In other words, this bullish dynamic is supported by heavy speculation via derivatives, notably perpetual contracts, rather than organic demand on the spot market.

Several technical factors help explain this timely performance of Monero, out of sync with the rest of the privacy coins:

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  Persistent selling pressure on the spot market, with little support from typical buyers ;
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  A positive imbalance on perpetual markets, signaling a push fueled by leverage ;
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  Rising cumulative volume on futures, according to on-chain data, contrasting with relatively stable spot volume;
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  A daily increase of 4.1 %, while Dash lost 7.3 % and Zcash 4.4 % ;
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  No identifiable fundamental impetus (partnership, technological announcement), confirming the speculative nature of the rise.

Indeed, Monero attracted attention this week not because of an innovation or renewed interest in its technology, but because it was the vehicle for an opportunistic strategy on derivatives. This dynamic, as rapid as it is unstable, could reverse sharply if leveraged positions are liquidated without support on the real market.

Zcash in Freefall

Opposite to Monero, Zcash suffers a significant 25 % drop over the week. Some observers mistakenly interpret this decline as a loss of interest in the project.

However, according to Quinten van Welzen, head of strategy and communication at Zano, this drop does not reflect a fundamental disinterest: “short-term moves like Monero rising and Zcash falling mainly reflect positioning, leverage, and timing rather than a reversal of privacy demand,” he said.

Such a correction thus fits into a capital rotation dynamic within the privacy coins microcosm, where arbitrages are often amplified by low liquidity and heavy speculation.

However, Zcash has a major asset: the interest of institutional investors. Crypto asset manager Grayscale has filed a request with the SEC to convert its Grayscale Zcash Trust into an ETF. If approved, it would be the first ETF backed by a privacy coin, potentially paving the way for wider adoption of ZEC on regulated markets.

This prospect, although not yet finalized, represents a significant strategic difference compared to Monero, often shunned by institutional players because of its total opacity.

In this light, the evolution of Zcash’s situation could well be determined by medium-term regulatory developments rather than solely by the speculative dynamics seen this week. If the ETF is approved, it could catalyze a new wave of institutional interest in privacy coins. Conversely, an SEC rejection could reinforce regulated markets’ aversion to this type of asset, favoring more open or technically hybrid projects.