Privacy coins have emerged this year as one of the major investment trends currently shaping the crypto landscape. In this sector, Zcash (ZEC) and Monero (XMR) are the two clear leaders, whether in terms of volume or market capitalization.
Recently, investor attention has largely focused on ZEC. However, at the same time, XMR maintains its trajectory with solid and steady growth.
XMR, the discreet dominant
In the spot market, the daily transaction volume of ZEC showed remarkable performance in December.
Indeed, according to CoinGecko, ZEC displays a daily transaction volume nearing one billion dollars. This level surpasses XMR and DASH, with a dynamic driven by the strong liquidity available on major exchanges, particularly Binance.
However, ZEC shows a net lag in the number of transactions executed on-chain each day. According to data from BitInfoCharts, XMR averages around 26,000 daily transactions, which is more than three times the volume recorded by ZEC, which stagnates around 8,000 transactions per day.
The chart further reveals that the on-chain activity of XMR remains at a steady level over time, indicating stable usage habits among users. In contrast, the recent spike followed by the sharp drop of ZEC resembles more of a phase of temporary excitement.
Moreover, in the long term, on-chain activity represents a reality more significant than the volumes recorded in the spot market. It reflects the actual adoption of XMR for anonymous transfers and the concrete use by users, much more than short-term speculation.
It should also be noted that the price of ZEC is significantly more volatile, a direct effect of increased speculation. In contrast, the price of XMR shows a more stable evolution.
TradingView data indicates that ZEC has dropped by more than 40% over the last month. Several analysts thus mention the formation of a bubble pattern. Meanwhile, the price of XMR has only decreased by about 12%.
In this perspective, ZEC seems primarily suitable for traders eager for the narrative of privacy coins, seeking quick gains during the most extreme FOMO waves. The flip side corresponds to more pronounced pullbacks and rebound phases that stretch over time.
Furthermore, the latest report from MEXC Research reinforces XMR's dominant position over time. Indeed, over longer periods, XMR boasts higher trading activity and user volume than the combined totals of ZEC and DASH.
"Despite records in trading volumes for ZEC and DASH, Monero remains the preferred token of privacy coin traders, representing 93% of the total trading volume in the third and fourth quarters and concentrating 72% of the users in this segment," can be read in the MEXC Research post.
The report also emphasizes that the growing interest in these assets reflects an increased need for anonymity, as regulators intensify their oversight of capital movements.
In summary, whether favoring ZEC or XMR, investors could very well come out ahead in 2025. Many experts indeed predict that privacy coins will continue to fuel a major narrative in the market by 2026.
The moral of the story: As long as we have privacy coins, we are good.
