Privacy coins have emerged as one of the dominant narratives shaping investment trends in the crypto sector this year. The two main altcoins in this sector by volume and market capitalization are Zcash (ZEC) and Monero (XMR).
Investor attention has been heavily focused on ZEC. Meanwhile, XMR continues to show solid and consistent growth.
XMR surpasses ZEC in many ways despite the lack of visibility.
In terms of daily trading volume in December, ZEC performed exceptionally.
According to CoinGecko, ZEC maintains a daily trading volume close to 1 billion dollars. This level surpasses XMR and DASH, thanks to strong liquidity on major exchanges like Binance.
However, ZEC is lagging significantly in terms of daily on-chain transactions. Data from BitInfoCharts shows that XMR reaches an average of about 26,000 transactions per day. This figure is more than triple the average of about 8,000 daily transactions for ZEC.
The chart also highlights that XMR’s on-chain activity remains stable over the long term. This trend reflects stable user behavior. In contrast, the spike and subsequent drop of ZEC seem more akin to temporary enthusiasm.
On-chain activity carries greater long-term relevance than spot volume. It reflects real usage patterns and acceptance by users of XMR for anonymous transfers, rather than simple short-term trading sentiments.
Furthermore, the price of ZEC experiences greater fluctuations due to increased volatility related to speculative trading. The price movement of XMR also appears more stable.
Data from TradingView shows that ZEC has dropped by over 40% in the last month. Many analysts are now suggesting the possibility of a bubble pattern. Meanwhile, XMR has also recorded a decline, but on the order of about 12%.
From this perspective, ZEC is better suited for those riding the narrative of privacy coins and aiming for quick profits during extreme FOMO cycles. The downside is deeper price drops and longer recovery periods.
Moreover, the latest report from MEXC Research reinforces XMR's position. Over longer time frames, XMR shows higher trading volumes and user activity compared to ZEC and DASH.
"Despite ZEC and DASH recording record trading volumes, Monero remains the preferred asset among privacy coin traders, accounting for 93% of total trading volume in the third and fourth quarters and 72% of users in this segment," explained MEXC Research in detail in a report.
The report also highlights that the growing interest in privacy-focused assets reflects users' increasing demand for anonymity, in light of tighter capital controls by regulatory authorities.
Therefore, whether holding ZEC or XMR, investors may also continue to benefit in the coming year. Experts predict that privacy coins will remain a dominant narrative in the market in 2026.
