Privacy coins have emerged as one of the key narratives driving cryptocurrency investment trends this year. The two leading altcoins in this sector, based on trading volume and market capitalization, are Zcash (ZEC) and Monero (XMR).
Investor interest is primarily focused on ZEC. Meanwhile, XMR continues to show steady and strong growth.
XMR, low attention but superior to ZEC
In terms of daily spot trading volume in December, ZEC performed exceptionally well.
According to CoinGecko, ZEC maintains a daily trading volume of about 1 billion dollars. This level is ahead of XMR and DASH, thanks to the high liquidity at major exchanges like Binance.
However, ZEC's daily on-chain transaction volume is significantly lagging behind. According to data from BitInfoCharts, XMR's average daily transaction count is around 26,000. This figure is more than three times that of ZEC's approximately 8,000.
The chart also shows that XMR's on-chain activity has been consistent over the long term. This trend reflects stable user behavior. In contrast, the recent spikes and drops in ZEC's trading volume seem close to a temporary craze.
On-chain activity holds more significant meaning in the long term than spot trading volume. It shows actual use of XMR for anonymous transfers and user acceptance, rather than short-term trading sentiment.
Additionally, ZEC's price is highly volatile due to the increase in speculative trading, leading to significant fluctuations. XMR's price remains more stable.
According to TradingView data, the price of ZEC has dropped more than 40% over the past month. Several analysts are raising the possibility of a bubble pattern. Meanwhile, XMR has decreased by about 12%.
From this perspective, ZEC is suitable for traders following the privacy coin narrative and seeking short-term gains in the midst of extreme investment frenzy (FOMO) cycles. The downside is the potential for larger price drops and longer recovery periods.
Recently, the MEXC Research report has further strengthened XMR's position. In the long term, XMR shows superior performance in both trading volume and user activity compared to ZEC and DASH.
“Despite ZEC and DASH recording all-time high trading volumes, Monero remains the most preferred asset among privacy coin traders, accounting for 93% of total trading volume from Q3 to Q4 and 72% of users in this sector.” – MEXC Research Report.
The report also mentions that the growing interest in privacy assets indicates an increasing need for user anonymity as regulatory authorities tighten capital controls.
Thus, even holding ZEC or XMR, investors can continue to see profits next year. Experts predict that privacy coins will lead the market narrative in 2026.
