Privacy Tokens Outperform Broader Market
Monero (XMR), Dash (DASH), and Dusk (DUSK) have posted significant gains during a broader cryptocurrency market sell-off that saw nearly $1 billion in positions liquidated. The privacy coin category as a whole climbed 4% on the day and 13.1% on the week, defying downward pressure across most digital assets. Experts cite growing demand for defensive positioning as a key driver for this trend.
Key Privacy Coins See Notable Price Increases
Dash traded at $81.61, marking an impressive 119% increase over the past week. Monero reached a new all-time high last Thursday and is currently trading around $644, up 8.3% in the last 24 hours. Privacy coin Dusk surged dramatically, experiencing over a 118% increase in the past day and a remarkable 354% rise in the past week. In contrast, Bitcoin dropped 2.3%, with most altcoins experiencing declines of 3% to 10% during the same period.
Catalysts for the Privacy Coin Rally
Rachel Lin, co-founder and CEO of SynFutures, stated that the recent uptick in privacy tokens reflects both short-term catalysts and a deeper shift in investor narrative. The rally was further amplified after on-chain investigator ZachXBT flagged large amounts of stolen Bitcoin and Litecoin being converted into Monero. This activity pushed Monero's trading volumes higher in a relatively thin market, contributing to its price reaching new highs.
Regulatory Environment and Diversification
According to Lin, a broader re-rating is occurring across the privacy sector. This is primarily driven by intensifying global regulations, heightened on-chain surveillance, and increasing compliance requirements. Privacy coins also offer a low correlation to Bitcoin, making them an attractive option for investors seeking portfolio diversification during periods of market volatility and regulatory uncertainty.
Defensive Positioning in Uncertain Times
Shivam Thakral, CEO of Indian crypto exchange BuyUCoin, highlighted that privacy coins tend to move counter-cyclically during periods of heightened uncertainty. He emphasized that the recent gains reflect defensive positioning rather than speculative excess. The ongoing threat of a U.S.-EU trade war re-emergence is pushing investors toward assets that offer financial confidentiality features.
Institutionalization and Demand for Privacy
Thakral explained that the increasing institutionalization of crypto has made public blockchains more traceable. This, in turn, has created demand for opt-in privacy features. He identified this as the key reason why the privacy narrative has remained strong since 2025, as mainstream adoption brings increased surveillance capabilities that some market participants seek to avoid through cryptocurrency privacy protocols.
Privacy as a Risk-Management Feature
Ongoing macroeconomic and geopolitical conditions, combined with a push toward increased regulatory and capital controls and data surveillance, have elevated privacy from a niche ideology to a legitimate risk-management feature. Analysts tracking sector developments note that Vitalik Buterin's recent call for privacy and decentralization has added further credibility to this narrative.
Zcash as an Exception
Zcash (ZEC) proved to be an exception to the general privacy coin surge, experiencing a decline of 6.8% on the day and 6% on the week. This downturn followed turmoil at the Electric Coin Company earlier this month. Users of the prediction market Myriad remained divided on Zcash's future outlook, with a 51% chance placed on its next move taking it to $550 rather than $250.