Zcash fell 8.5% over 24 hours, while Monero dropped 5.4% and Dash shed 3.9%, according to data tracked by market analysts.
Privacy Coin News
Zcash, Monero, and Dash declined sharply during the broader crypto market downturn, with privacy coins shedding recent gains as they moved in tandem with major assets rather than serving as portfolio hedges.
Zcash fell 8.5% over 24 hours, while Monero dropped 5.4% and Dash shed 3.9%, according to data tracked by market analysts. The privacy coins sector declined by 15.4% overall, marking a reversal for tokens that posted explosive rallies throughout the fourth quarter.
Slava Demchuk, CEO of AMLBot, stated the safe haven narrative for privacy coins broke in December as markets priced in reality. He noted Zcash and Dash maintain most on-chain volume as transparent transactions, causing them to trade as speculative narratives rather than utility tools, and to drop like standard high-beta altcoins.
The parallel movement with Bitcoin reflects a fundamental shift in how these tokens trade, according to analysts. Jamie Elkaleh, CMO at Bitget Wallet, stated privacy assets now behave less like isolated hedges and more like high-beta components of the broader ecosystem as ETF positioning and monetary policy expectations increasingly dictate crypto market direction.
Despite current weakness, core drivers for privacy technology remain intact. Demchuk explained rallies have historically been fueled by three factors: technological advancement in cryptographic privacy, political and regulatory pressure such as the EU chat control proposal, and genuine demand from users in jurisdictions where transparent ledgers pose real-world risks.
Ethereum co-founder Vitalik Buterin recently weighed in on Zcash's governance debate, warning that a shift to token voting could undermine privacy guarantees. The discussion highlighted ongoing tension between decentralization and security in the privacy coin sector.
Recovery prospects for privacy coins are now tied directly to broader market stability. Demchuk stated that if Bitcoin stabilizes at higher levels and risk appetite returns, these coins can claw back recent losses, noting they historically move harder than Bitcoin during market rotations.
Elkaleh echoed this outlook, stating liquidity tends to flow outward from Bitcoin into higher-beta sectors once risk appetite returns. Privacy coins have historically outperformed during these rotations, especially when sentiment shifts from defensive to exploratory, according to the Bitget Wallet executive's assessment of current cryptocurrency market dynamics.
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