Privacy coins stood out in an otherwise volatile 2025 crypto market, with XMR and ZEC leading a sector-wide re-rating that pushed the aggregate market cap up 200% year over year to $19 billion by late November. While major assets first hit highs and then gave back gains, privacy tokens held a distinct trajectory driven by protocol upgrades and renewed interest in shielded transactions.
Privacy Coins Outperform in Volatile 2025 Market
The broader market saw sharp swings: bitcoin reached a record high of just over $126,000 on Oct. 13 but traded substantially lower by mid‑December, and many altcoins erased most of their mid‑year gains. Against that backdrop, privacy coins bucked the trend, with ZEC and XMR cementing leadership through both price action and technical work. For additional context on which assets climbed in 2025, see which altcoins rose.
Zcash’s Record-Breaking Rally in 2025
Zcash’s run was the most dramatic: at its peak ZEC’s year‑over‑year gains exceeded 1,500% after the token traded above $700, and the project’s market capitalization surpassed $12 billion. The token later retraced from those highs but remained up substantially versus the start of the surge.
- Network Upgrade (NU) 6.1 — fixed a persistent RPC bug so Orchard‑shielded transactions were correctly shown in wallets and explorers.
- Zashi wallet — improvements aimed at usability and user experience to make private transactions easier.
- Ztarknet — testnet activation to advance scalability and zero‑knowledge integration.
- The Halving — a November supply‑reduction event that reinforced the privacy narrative for some investors.
Observers remain divided over the rally’s drivers: some point to abrupt price swings and possible whale activity, while project supporters highlight protocol work and growing wallet integrations. As Joel Valenzuela noted, the leadership at Electric Coin Company under Josh Swihart has been "stellar," and Shahaf Bar‑Geffen said that "users are exploring private transactions again, thanks to better tooling and wallet integrations that are making privacy more accessible than ever."
Monero’s Technical Advancements and Market Performance
Monero’s price trended upward earlier in the second half of the year and reached just under $440 on Dec. 1, 2025, reflecting sustained demand for on‑chain privacy. Rather than a single hard fork, Monero deployed a sequence of iterative upgrades and side‑projects focused on strengthening anonymity and reducing technical debt.
- Full‑Chain Membership Proofs (FCMP) — expanded Monero’s anonymity set by moving beyond the traditional ring‑size model to obscure a transaction’s origin across the full chain history.
- Spy Node Protections — introduced in late October to thwart node‑based deanonymization attempts that link IP addresses to transactions.
Those measures helped Monero consolidate its position within the privacy segment and contributed to its outsized gains through the year; for more on Monero’s market trajectory, see Monero market growth.
Divided Analyst Opinions on Privacy Coin Growth
Market commentators offered competing explanations for the privacy sector’s advance. Skeptics point to abrupt drops and concentrated moves as signs of whale influence, citing sharp sell‑offs during short windows as cause for caution. Proponents counter that meaningful protocol improvements, wallet integrations and supply events underpinned renewed retail and institutional interest in private transactions.
Divergent Results Across Other Privacy Projects
Not all privacy projects shared XMR and ZEC’s gains: some tokens saw most of their 2025 appreciation evaporate late in the year. Dash, for example, fell from a Nov. 5 high of $120 to about $38 by Dec. 18, underscoring that investors increasingly favored a smaller set of established winners over the broader category.
Why this matters (for a miner in Russia)
Higher valuations and renewed attention to privacy coins can influence miner decisions even if you run a small setup. Increased market cap and demand may raise short‑term selling opportunities and fees for mined coins, while protocol changes can affect wallet compatibility and node behavior you should be aware of. At the same time, volatility remained high across markets, so mining income can swing with sudden price moves and network adjustments.
What to do? (practical steps for Russian miners)
- Check wallet compatibility and upgrades before moving mined coins: ensure your wallets reflect NU 6.1 changes for ZEC and the latest Monero protections.
- Monitor pool and node software for updates that implement FCMP and Spy Node Protections to avoid propagation or reporting issues.
- Consider short‑term liquidity plans: with high volatility, set rules for when to convert mined coins to fiat or BTC to manage cash flow.
- Keep an eye on network events like halvings that can change issuance rates and miner rewards; plan equipment and power costs accordingly.
FAQ
Why did privacy coins surge in 2025? The sector re‑rated as ZEC and XMR outperformed broader market declines, supported by technical upgrades, wallet improvements and renewed interest in shielded transactions, which together lifted the category’s market cap.
What triggered Zcash’s massive rally? ZEC’s gains were driven by several technical milestones — including NU 6.1, Zashi wallet work, Ztarknet testnet activity — and a November halving, though some analysts warned of concentrated buying and selling activity.
Why did Monero outperform other privacy assets? Monero focused on incremental hardening of its privacy layer, notably introducing Full‑Chain Membership Proofs (FCMP) and Spy Node Protections, which expanded anonymity and reduced deanonymization risks.
Will the privacy trend continue into 2026? Industry voices in the coverage expect privacy to remain an important narrative, arguing that data exposure on public blockchains will keep driving demand for stronger privacy tools, though views vary on timing and magnitude.
