Time for anonymity? There has been relatively little talk about the privacy altcoins Monero (XMR) and Zcash (ZEC) lately, but they have quietly gained momentum over the week. What accounts for this renewed interest and will it continue?
Monero and Zcash jump on the week
Most of the “big” cryptocurrencies have seen very measured gains over the past week. Bitcoin (BTC) posted a meager +0.4%, Ether (ETH) was at the same point with +0.7%, and Binance’s BNB even fell -1.8%.
But against this, the anonymous altcoins Monero and Zcash seem to be in notable form. Over the last seven days, XMR has shown +19%. The jump in ZEC is even more pronounced, with a +49.5% increase over the same period.
This pushes the capitalizations of the two crypto currencies back up into the top 100, with Zcash now sitting in 62nd place, with a capitalization of $1.8 billion and Monero is 38th, with $3.3 billion.
According to data published by Cryptoslate, the trend is also observable among all the privacy coins. Their combined market cap thus shows an increase of +12.9% over the last seven days.
How to explain these progressions?
Since the crypto community is particularly fickle, anonymity altcoins were not especially making headlines in recent months, and their prices had tended to fall. So how can we explain this renewed interest in Zcash and Monero?
We can only speculate, of course, but it is likely that the traceability of “classic” crypto-currencies has been particularly highlighted in recent weeks. Economic sanctions against Russia have been discussed, and with it the idea that crypto-currencies are overall too traceable to be used by Putin. So the appeal of ZEC and XMR is perhaps a reaction to this awareness of the transparency of major blockchains.
We can also mention the continued attention of regulators, who are keeping a closer eye on crypto-assets at the moment. Today, the MiCA regulation is expected to be voted on at the European level, and the supervision of the mining sector is a concern, while it is still unclear how the new rule could be enforced.
The situation in Ukraine has also shown how easy it is to block funds on centralized platforms. Proof of this was Coinbase, which just last week blocked 25,000 Russian-owned addresses.
Although the crypto community has overwhelmingly supported Ukraine, it is therefore concerned about the fallout of the situation on the ecosystem as a whole. Several politicians have indeed taken advantage of the concerns to push for stricter regulation of cryptocurrencies, even though Putin has shown no signs of using them.
Could anonymity altcoins then move forward, and attract new investors? That remains to be seen, but this week tends to indicate that they are of interest, at least to a fraction of the crypto community.
