Retail Demand Pushes Privacy Coins to Record Highs in Market Rally

CryptoQuant data shows that retail investors are driving the recent surge in privacy coin values. The tokens have gained momentum due to increased individual interest.

CryptoQuant continues to closely analyze the sector’s performance. According to the analytics firm, retail interest in privacy coins, particularly Zcash (ZEC) and Dash, is driving them to their current highs. It said:

Signs of the surge in open interest in ZEC are evident on Coinglass. CryptoQuant data shows that ZEC’s open interest rose sharply from around $30 million on September 30. By November 10, it had surged past $1 billion.

Zcash Leads Privacy Coin Renaissance

Meanwhile, ZEC has seen the largest gains among all privacy coins since the resurgence began. According to CryptoQuant, the token has increased by 707% since September 30.

This makes it the best-performing asset in that period, as it went from $74 to a peak above $700. It is now trading $600 after recent pullbacks. However, the token is still up almost 1,000% this year and is now in the top 20 biggest cryptocurrencies.

Unsurprisingly, it also dominates futures trading volume with $20 billion and 24-hour trading volume of $3.73 billion. Interestingly, the asset, despite its gains, remains down significantly from its peak price of $5,941 back in October 2016.

While ZEC is leading the group, other privacy coins are also doing well. DASH is up 263% since September 30, while XVG gained 44%. Monero XMR has also gained 23.7% in that period.

With their gains, all the assets have also seen their futures trading volume surpass previous hype cycles. Privacy coins now account for their highest share of market activity ever, with around 6% of total trading volume.

Interestingly, most privacy coin trading is happening on Binance. The world’s largest centralized exchange accounts for 78% of all privacy coin volume, with Bybit accounting for 17%.

Is Privacy Coin Hype Sustainable?

ZEC and other privacy coins are experiencing a surge in value. Crypto enthusiasts are actively debating the sustainability of this performance. Many believe it is just another fad that will soon fade away.

However, supporters believe that privacy coins are the real deal. The support for privacy has grown in recent months, partly due to renewed interest in the cypherpunk origins of cryptocurrencies.

Some people have also criticized the institutionalization of Bitcoin with the ETFs. At the same time, concerns about government surveillance have increased. All these factors, coupled with recent developments on Zcash that have made the network more usable, contributed to the resurgence.

Developers on the network are now working on Tachyon, an upgrade that is expected to improve its scalability. Meanwhile, interest from popular investors has also fueled ZEC’s performance.

Bitmex founder Arthur Hayes disclosed massive exposure in ZEC while entrepreneur Naval Ravikant described it as “insurance against Bitcoin.”

Helius Labs founder Mert Mumtaz has also been very bullish on privacy and Zcash. He described privacy as the last 1,000x in crypto, noting that Bitcoin started with three problems: legitimacy, programmability & scale, and privacy.

Mumtaz believes Bitcoin solved the legitimacy issue by reaching a trillion-dollar valuation. He also states that Ethereum and Solana addressed programmability and scalability challenges. He is now counting on chains like Zcash that will solve the privacy issue.