Introduction to Privacy Coins
While the crypto market continues to experience declines, privacy coins have seen a surprising increase in value. According to Grayscale Research’s October 2025 report, the Zcash network’s ZEC token gained 248% over the month, reaching a market capitalization of approximately $6.5 billion. This trend has also been observed in other privacy coins such as Litecoin (LTC), Monero (XMR), and Dash (DASH), which have shown increasing adoption, according to CoinMarketCap’s list of top-performing privacy tokens.
Understanding the Rise of Privacy Coins
Industry experts believe that the increasing popularity of privacy coins is inevitable, given the growing focus on financial infrastructure for real-world use cases. Howard Wu, CEO of Provable and founder of Aleo, explains that data protection is becoming a priority, driven by the market’s need for confidentiality. As the enterprise blockchain sector is expected to reach $287 billion by 2032, institutions are turning to privacy coins to find solutions that provide some form of confidentiality.
Source: Grayscale Research
Institutional Use of Privacy Coins
Carter Feldman, founder and CEO of Psy Protocol, notes that institutions are using privacy coins for selective transaction privacy and investment vehicles such as the Grayscale Zcash Trust. Charlie Lee, the creator of Litecoin, emphasizes that privacy is crucial for companies trading LTC, while Will Wendt, Head of Ecosystem at Oasis Protocol, highlights that projects developing privacy-preserving technologies are attracting institutional attention.
The Importance of Privacy
Gracy Chen, CEO of Bitget, explains that the same privacy principles are being incorporated into newer Web3 networks, focusing on compliance-friendly privacy. Tom D’Eletto, head of product at Arculus, notes that there is a difference between privacy and anonymity, and institutions must continue to comply with regulations.
Regulatory and Technical Challenges
Eric Jardine, head of research at Chainalysis, highlights the challenge of finding the right balance between protecting user privacy and enabling lawful oversight. Charlie Lee notes that there are technical challenges associated with privacy coins, including the risk of hidden inflation and quantum attacks.
Future of On-Chain Privacy
Carter Feldman believes that the demand for on-chain privacy will continue to grow, with the emergence of next-generation blockchains designed for privacy-preserving smart contracts. While the trend of privacy coins gaining traction may be a temporary phenomenon, the importance of privacy in the crypto market is undeniable.
Read more about institutions buying into the privacy coin hype at https://cryptonews.com/news/institutions-are-buying-into-the-privacy-coin-hype-but-will-it-last/
