Crypto’s Anti-Surveillance Boom: Zcash, Monero and the Return of Anonymity

In the second half of 2025, privacy coins have suddenly become the market’s pace-setters while the rest of crypto grinds through ETF flows, basis trades and macro beta. Zcash’s resurgence, helped by wallets that make privacy the default and a power shift against longtime rival Monero, suggests the industry may have come full circle: from cypherpunk ideals of permissionless, untraceable cash to an ETF-soaked, surveilled market, back to “digital cash” that resists traceability.

CoinDesk Research’s deep dive on Zcash frames the pivot: shielded adoption has climbed to roughly a fifth of supply; more than 30% of transactions now touch the shielded pool; and Zashi, a first-party wallet, makes private transfers the default and enforces “shield before spend.” The effect is an expanding anonymity set and a user experience that no longer treats privacy as an advanced setting, but the baseline of how money should move.

Markets signal sentiment shift

The price action tells its own story: ZEC$477.82 is up roughly 741% since Sep. 28, while XMR$358.58 has risen about 54% since August. Even long-dormant names like DCR$43.69 and DASH$119.73, both early privacy-oriented projects dating to 2017 and 2014, have rallied 145% and 337% respectively in recent weeks.

What makes the move remarkable is that it’s happening against a bleak macro backdrop. BTC$104,180.68 and ether ETH$3,442.99 have slumped to multi-month lows as traders rotate out of risk and back into a stronger U.S. dollar. The inverse correlation has given the move in privacy coins a symbolic edge: investors seem to be buying privacy, not yield.

From institutions back to individuals

It’s a striking reversal for a market that spent the past two years celebrating the arrival of ETFs, custodians and corporate compliance desks. Privacy coins are now thriving precisely because they represent the opposite of that trend: Tools for individuals, not institutions.

To early cypherpunks, privacy wasn’t a marketing gimmick. It was the foundation of financial freedom. Over a decade later, the appeal is returning for a different reason. In a world of AI-enhanced surveillance and constant data collection, anonymity is being re-framed not as secrecy, but as self-protection.

Zcash’s comeback reflects that sentiment shift. The network’s technology, built on zero-knowledge proofs that let users verify transactions without revealing them, has matured to the point where privacy doesn’t require trade-offs. Transactions settle in seconds, shielded balances sync quickly, and compliance features like viewing keys allow users to share data selectively. It’s privacy as a default, not a loophole.

The Tornado Cash cautionary tale

That doesn’t mean regulators are looking the other way. The prosecution of Tornado Cash developers remains a reminder that privacy still lives in a legal gray zone. In August, a New York jury found co-founder Roman Storm guilty of running an unlicensed money-transmitting business, though it failed to convict on the more serious money-laundering charges. In the Netherlands, developer Alexey Pertsev is serving a five-year sentence on related grounds.

However, the winds may be turning. In March, the U.S. Treasury quietly removed Tornado Cash from its sanctions list, acknowledging that the case raised difficult questions about code, speech and liability. It was a tacit admission that the blunt instrument of sanctions may not fit decentralized software.

The contrast with Zcash is instructive. Tornado was a mixer, a smart contract that pooled and redistributed funds, while Zcash is a full blockchain with built-in privacy and an option for transparency. That architectural difference makes blanket bans far harder to enforce.

Traders rediscover “digital cash”

Bitcoin acted as proof that money can exist without banks, privacy coins are now proving it can exist without surveillance. Recent trading flows show capital migrating toward assets that function more like cash, immediate, permissionless, and difficult to track.

Zcash and Monero are leading that shift for a clear reason: they’re being used, not just traded. On-chain data show Zcash’s shielded pool, where senders, receivers and amounts are encrypted, has grown to hold roughly 25–30% of circulating supply, its largest share since the network launched.

Analysts at CoinDesk Research say more than a third of transactions now touch that private layer, evidence that users are actively moving coins into encrypted channels rather than keeping them visible on public ledgers.

Crypto goes full circle

The rally in privacy coins may be less about speculation than identity. Bitcoin showed that money could move without borders; Ethereum proved finance could run without intermediaries; Zcash is reminding markets that financial privacy still matters.

After years of institutional packaging, derivatives and ETFs, the pendulum is swinging back toward the ideals that launched the industry in the first place: individual liberty and the right to transact without oversight.

Whether or not regulators allow this shift to continue without oversight remains to be seen, but the market is clear in its conviction —2025’s best-performing crypto assets are ones that resemble cash, and that trend looks set to continue.