How Zcash regained the privacy title from Monero

For almost ten years, the competition between Zcash (ZEC) and Monero (XMR) has shaped the landscape of cryptocurrency privacy.

Both digital currencies offered what Bitcoin could not: genuine transactional anonymity, yet they pursued this goal through distinct approaches. Monero made privacy a requirement, encrypting every transaction by default, while Zcash provided an option, enabling users to select between full transparency and total privacy.

For a significant period, this choice appeared to disadvantage Zcash. Monero’s steadfast design garnered the allegiance of cypherpunks, darknet users, and privacy advocates who perceived ZEC’s “opt-in” approach as a concession.

However, as regulatory pressures increased and exchanges began to remove privacy tokens, Zcash’s hybrid model has transformed from a liability into an asset.

This autumn, Zcash surpassed Monero in market capitalization for the first time in seven years, reclaiming the title of “privacy leader.” Data from CoinGecko indicates that ZEC now boasts a market cap of $7.5 billion, compared to Monero’s $6.3 billion, placing it among the top 20 cryptocurrencies worldwide.

Zcash vs. Monero Market Cap. (Source: CoinGecko)

This change signifies not only a shift in rankings but also a more profound narrative transformation. The very framework that once rendered Zcash contentious—its equilibrium between privacy and compliance—is now drawing institutional investment, ETF connections, and mainstream credibility.

From Cypherpunk to Compliant

Zcash was introduced in 2016 by the Electric Coin Company (ECC) under the guidance of cypherpunk founder Zooko Wilcox. The objective was to tackle Bitcoin’s most significant drawback: the traceability of its transactions.

Utilizing advanced zero-knowledge proofs (zk-SNARKs), Zcash enabled users to fully encrypt sender, receiver, and amount information while still validating transactions to the network.

However, the protocol introduced a unique flexibility that allowed users to choose between transparent (T-address) or shielded (Z-address) transactions. This optionality alienated privacy purists but facilitated regulatory compliance, as crypto exchanges could list ZEC since it was not entirely anonymous by default.

Conversely, Monero, established in 2014, took a different route. It mandated privacy universally through ring signatures and stealth addresses, rendering every transaction opaque and untraceable. For years, this approach granted Monero dominance in the privacy sector, making it a currency resistant to chain analysis.

Yet, Monero’s strength has also turned into its vulnerability. Since every transaction is private, the network remains under regulatory scrutiny. It has been delisted from several prominent exchanges, including Binance, OKX, and Huobi, due to concerns regarding anti-money laundering (AML) regulations.

In contrast, Zcash continues to trade freely on compliant platforms, and this accessibility is now more significant than purity.

The 51% moment that changed everything

The pivotal moment for the two privacy-centric blockchain networks occurred in mid-2025 when the AI-driven protocol Qubic claimed to have achieved majority control of Monero’s hashing power, executing a 51% attack that undermined confidence in the network.

The attackers reportedly reorganized six blocks and orphaned numerous others, effectively altering parts of the blockchain’s recent history.

A few weeks later, independent observers reported another 18-block reorganization, the largest in Monero’s history. Although no double-spend occurred, these incidents exposed structural weaknesses.

For investors and exchanges, this confirmed long-held concerns: Monero’s dedication to anonymity complicated its security and auditability.

In contrast, Zcash had quietly developed a more contemporary governance and upgrade framework through ECC, the Zcash Foundation, and Zashi, its consumer wallet initiative.

This stability, coupled with a perception of regulatory friendliness, created an ideal environment for Zcash’s resurgence.

How Zcash rallied

Zcash’s rise did not occur in a vacuum. Over the past year, privacy tokens have surged amid a broader backlash against global surveillance initiatives, from the EU’s MiCA digital ID regulations to the UK’s data-sharing proposals.

In this context, investors rediscovered ZEC. The token surged nearly 200% in a month and 1,000% year-on-year, reaching a seven-year peak of $478 before a slight correction to $461. Unlike previous speculative surges, this movement had institutional backing.

Grayscale’s Zcash Trust (ZCSH) yielded 90% in September alone, while open interest in ZEC reached a new all-time high of nearly $700 million.

Zcash Open Interest (Source: CoinGlass)

Market participants interpreted these inflows as early indicators of a “regulated privacy trade”: exposure to cryptographic privacy without the legal complications associated with Monero.

In light of this, Arthur Hayes, CIO of Maelstrom, suggested that the token could reach $10,000 while characterizing Zcash as the “clean privacy bet.”

Furthermore, Zcash’s recent momentum is grounded in substantial technical advancements.

In its October 2025 roadmap, the ECC detailed several upgrades aimed at simplifying and securing private transactions.

The plan introduced ephemeral addresses for each swap via the NEAR Intents protocol, automatic address rotation upon receipt of funds, hardware resync capabilities for Keystone wallets, and multisig Pay-to-Script-Hash (P2SH) support to enhance the protection of developer funds.

Zcash’s Roadmap (Source: Electric Coin Company)

Together, these enhancements streamline user interactions with ZEC through the Zashi wallet, which launched earlier this year. Once criticized for its complicated privacy processes, Zcash’s interface now operates with the simplicity of mainstream crypto wallets, thereby eliminating a significant usability hurdle.

Perhaps most notably, over 30% of the total ZEC supply now resides in shielded pools, indicating that privacy usage is beginning to align with market speculation.

As more transactions transition into these encrypted channels, Zcash’s overall anonymity set expands, reinforcing both its privacy assurances and the network’s long-term durability.

The post How Zcash reclaimed the privacy crown from Monero appeared first on CryptoSlate.