Monero Reclaims Privacy War Lead as Zcash Falters

Over the past week, XMR has emerged as the top-performing asset across the digital asset stack, rallying +45.1% on the week, with most of the move occurring in the past 48 hours.  

In the process, XMR reclaimed prior cycle highs and extended into uncharted territory, printing a new all-time high of $684.61 as of 09:00 UTC  on 13 Jan. 

Against Bitcoin, XMR has broken a multi-year downtrend, showing the first credible signs of a potential long-term trend reversal if sustained. 

Over the same period, Monero’s closest competitor Zcash has erased roughly a fifth of its value, with downside momentum accelerating following reports on 8 Jan of core developers' withdrawal. 

(Source: TradingView, CoinMetrics)

That event acted as a catalyst. As uncertainty around ZEC’s roadmap intensified, capital rotated aggressively within the privacy segment, with XMR absorbing the bulk of privacy-focused flows. 

(Source: TradingView, CoinMetrics)

Open interest confirms the broader picture. Since the announcement, ZEC open interest has plunged -6.8% to $433.8mn from $465.4mn, slowly rebuilding from a sharp drawdown. On the other hand, XMR's open interest has more than tripled, reaching $171.5mn from $55.4mn, highlighting the rising speculative rotation occurring in the privacy sector.

The foundations behind Monero’s strength  

As governments accelerate the rollout of CBDCs, expand surveillance capabilities, and hard-wire compliance into financial infrastructure, privacy is no longer a niche preference. 

Monero stands apart because privacy is not a feature; it is the cornerstone. 

Every transaction conceals the sender, recipient, and transferred value by default, using layered cryptographic techniques that eliminate the possibility of a transparent transaction graph. There is no opt-in switch and no partial disclosure state. Privacy is enforced at the protocol level. 

Zcash, by contrast, relies on optional shielded pools. While its zero-knowledge cryptography (zk-SNARKs) is academically robust and institutionally palatable, most ZEC transactions still occur in transparent pools. Privacy exists, but only when it is explicitly chosen. 

After a wave of major exchange delistings in early 2024 targeting privacy-focused coins, XMR was progressively pushed out of centralized venues. Access narrowed, liquidity pathways fragmented and visibility declined. By conventional market logic, that should have marked the beginning of a slow fade. 

Instead, it exposed a demand that existed independently of convenience. Removing centralized rails stripped away casual speculation. What remained were users with clear intent, and the shift accelerated self-custody adoption, incentivized the development of private access points and hardened the network’s participant base. 

Despite censorship, activity persisted. Despite friction, liquidity adapted. Despite pressure, the network continued to grow. 

And this conviction has been heavily expressed in watts and sunk costs over the years. 

(Source: CoinMetrics)

Even as Monero has faced periodic threats - including the recent attempt to concentrate mining power through Qubic-linked activity - its network security has continued to trend higher. 

Throughout 2025, Monero’s hashrate increased by 79.6%, reflecting both expanding miner participation and durable economic incentives to secure the chain. 

Hashrate is not an abstract metric. It represents real capital deployed with long-term horizons. A rising hashrate raises the cost of attack, signals sustained transactional demand, and reflects confidence from participants willing to commit to hardware and energy over short-term price action. 

Zcash: Temporary dislocation or structural issue? 

Part of the move clearly reflects rotation. When stress hits a niche, capital often rushes toward the next most obvious substitute. Right now, momentum favors XMR because it offered immediate certainty when ZEC wavered. 

Importantly, some Zcash fundamentals remain intact, including shielded pool activity and shielded transaction counts, which show no sign of a mass exodus.  

(Source: CoinMetrics)

Where concerns deepen is at the ecosystem layer. One emerging red flag is the slowdown in NEAR Intents trading volume - a key integration that enabled native, shielded, cross-chain swaps directly on-chain for Zcash. Daily volume has fallen to multi-month lows, suggesting a potential weakening in user engagement at precisely the wrong moment. 

At the same time, developer activity has deteriorated meaningfully over the past quarters, according to the protocol GitHub. 

Even more concerning, the last integration registered zero GitHub commits, the first time this has occurred since the project’s inception. This raises the risk that the recent team departures are not a recent disruption, but the surface expression of a deeper, longer-running structural issue. 

Only weeks ago, Zcash was at the forefront of the privacy trade. Meanwhile, Monero remained burdened by long-standing criticism of its privacy via obfuscation rather than pure encryption, a less academically pristine design and a perceived misalignment with regulatory frameworks. 

But reflexivity works in both directions, and it’s worth remembering how quickly market narratives can invert. Zcash has deliberately positioned itself as the most regulatory-aligned privacy protocol in the market, and that distinction mattered until momentum shifted. 

Markets don’t adjudicate philosophy in real time. They respond to flows. When confidence breaks, capital rotates first and reassesses fundamentals later. 

In those moments, price becomes the narrative carrier, but over longer horizons, structure reasserts itself. Once volatility compresses and positioning resets, fundamentals regain their weight. 

For Zcash, that means governance clarity, development continuity and its unique position as the only privacy protocol designed to operate within regulatory boundaries. 

Momentum currently favors Monero. Reflexivity ensures that it won’t always be the case.