Zcash Surpasses Monero as Privacy Coins Surge Amid Regulatory Changes

Zcash (ZEC) has overtaken Monero (XMR) in market capitalization for the first time in seven years, marking a significant shift in the privacy coin sector. As of now, Zcash boasts a market cap of $7.9 billion, while Monero stands at $6.9 billion. This change is largely attributed to evolving regulatory landscapes, increasing interest from institutional investors, and a resurgence in market confidence.

Market Dynamics and Technical Outlook

At the time of writing, Zcash is trading at approximately $511.93, having rebounded from a support trendline established by connecting the lows from October 17 and 23. Analysts suggest that the cryptocurrency could target its recent peak of $684, especially as it moves above the 50-day Exponential Moving Average (EMA). The four-hour chart indicates a reduction in selling pressure, with the Moving Average Convergence Divergence (MACD) approaching a potential crossover that may signify renewed buying interest. The Relative Strength Index (RSI) has moved to 48, suggesting a shift from sell-side dominance to neutral territory. Should the RSI rise above the midpoint line, it could indicate an increase in buying momentum.

Support levels for Zcash may be found at the rising trendline around $450, with further backing from the 200-day EMA at $379.

The Rise of Zcash and Shift in Institutional Preferences

Zcash’s opt-in privacy feature, once seen as a disadvantage compared to Monero’s complete privacy model, has now become a strategic advantage. Zcash allows users to select between transparent or shielded transactions, positioning it favorably in regulatory environments that emphasize Anti-Money Laundering compliance. This flexibility has made Zcash a more appealing choice for major exchanges, contrasting with Monero, which mandates total privacy through features like ring signatures and stealth addresses.

Monero’s market position weakened significantly in mid-2025 following a coordinated 51% attack on its network. This incident exposed vulnerabilities in its mining framework and led to delistings from major exchanges such as Binance, OKX, and Huobi, further isolating it from institutional markets. Analysts are now viewing Zcash as a compliant alternative that can maintain user privacy while adhering to regulatory standards.

A notable catalyst for Zcash’s recent upswing is the investment by the Winklevoss twins, who allocated over $50 million to rebrand Nasdaq-listed Leap Therapeutics as Cypherpunk Technologies (CYPH), a new Zcash treasury entity. The company currently holds 203,775 ZEC, representing around 1.25% of the total supply, with ambitions to increase its holdings to 5%. This announcement led to a remarkable 200% surge in Zcash’s value over the past month, elevating prices above $500 and indicating potential for continued upward momentum toward the $684 resistance level.

Arthur Hayes, former CEO of BitMEX, has publicly endorsed Zcash, labeling it the “clean privacy bet” and projecting a long-term price target of $10,000. His endorsement highlights ZEC’s ability to offer user anonymity without infringing on compliance, a critical factor for funds navigating increasingly stringent regulations. Furthermore, Grayscale’s Zcash Trust (ZCSH) reported a 90% return in September, reflecting growing institutional interest, with open interest in ZEC futures reaching $863.24 million.

Regulatory Climate and Future Outlook

The Electric Coin Company (ECC) has recently unveiled a roadmap for 2025, outlining significant updates aimed at enhancing user privacy. Key features include ephemeral addresses for each transaction through the NEAR Intents protocol, which would automatically rotate addresses upon receiving funds, and improved hardware support for Keystone wallets. The roadmap also introduces multisignature Pay-to-Script-Hash (P2SH) transactions aimed at bolstering the security of developers’ funds.

Amid increasing governmental focus on data-sharing and digital identification programs, investors are gravitating toward assets that protect financial autonomy while complying with regulatory requirements. Market data reveals that Zcash has surged nearly 1,000% year-to-date, while Monero has only seen a modest gain of 11.5%. Analysts assert that Zcash’s adaptability in regulated markets positions it as the preferred privacy asset for institutions, distinguishing it from Monero, which faces restrictions in these environments.

As the landscape for privacy coins continues to evolve, Zcash’s recent performance and institutional backing signal a promising future, with the potential for further growth as the regulatory framework surrounding cryptocurrencies develops.