Recently, the privacy sector has shown impressive performance: ZEC is up 6.1% in seven days; DASH is up 68% in seven days; ZK is up 53.9% in seven days. At the time of writing, the total market capitalization of privacy coins has surpassed $23.5 billion.

Why have privacy coins surged recently? Can this upward trend continue in the future?

I. The Surging Privacy Coins

1. ZEC (Zcash)
   ZEC is the native token of the Zcash blockchain network. Zcash is one of the early privacy-focused cryptocurrencies, launched in October 2016.

ZEC reached a recent high of $443 on November 1st. At the time of writing, it's trading at $388.43, up 6.1% in seven days.

The core of Zcash's privacy model is the shielded address, which uses zero-knowledge proofs (zk-SNARKs) to hide the sender, receiver, and transaction amount. Transactions sent between shielded addresses enter a pool for private transaction tokens. As the pool grows, the network's anonymity set expands, thereby enhancing privacy protection for all users.

This protected pool has now reached its largest size ever, close to 4.9 million ZEC.

In early October, Zcash's developer, Electric Coin Company, launched new features for its Zashi wallet, allowing users to perform cross-chain swaps and private payments through integration with Near's Intents system. This means users can easily transfer funds between Zcash's privacy layers without going through centralized exchanges or complex bridging interfaces.

This newfound convenience drove the expansion of the entire protected pool throughout October. In early October, transaction activity for Zcash on Near Intents surged, exceeding $17 million on October 16th alone.

Carter Feldman, Founder and CEO of Psy Protocol, pointed out: "Attention is shifting towards projects that aren't issuing tokens just for the sake of it, but are building privacy technologies, such as zero-knowledge systems driven by real incentive mechanisms. These systems can provide privacy by default without users having to explicitly opt for anonymity."

2. DASH (Dash)
   DASH is a veteran privacy sector cryptocurrency born in 2014.

DASH approached $94 on November 2nd. At the time of writing, DASH is trading at $84.91, up 68% in seven days.

Dash's recovery is remarkable, marking a significant turnaround for the privacy coin sector. After a prolonged bear market, Dash ended a 968-day decline. Analysts attribute this to tangible network development initiatives such as "Project Three Billion," which aims to promote the large-scale adoption of Dash in underserved markets.

DASH's privacy capabilities stem from its unique PrivateSend coin mixing protocol. This technology anonymizes transactions through a "split - mix - combine" process and can be completed solely with masternodes and the official wallet, without relying on third-party services. DASH's core positioning is "decentralized digital cash," aiming to solve the dual pain points of traditional cryptocurrencies in both privacy protection and practical payment scenarios. Unlike Bitcoin's public and transparent transactions, DASH meets user asset confidentiality needs through optional privacy features; compared to privacy coins focused on technical experimentation, it emphasizes "usability," promoting the scalable application of cryptocurrencies in scenarios like offline consumption and cross-border transfers by optimizing transaction speed and lowering the barrier to entry. This positioning of "privacy protection as the foundation, payment utility as the core" has led to its market revaluation against the dual backdrop of increasing global regulatory scrutiny and evolving payment needs in 2025.

3. ZK (ZKsync)
   Unlike traditional privacy coins, ZK is not a token focused solely on a single privacy function. Instead, it is a core asset rising with the triple attributes of "privacy + scaling + ecosystem" underpinned by the zkSync network.

ZK reached a recent high of $0.07 on November 2nd. At the time of writing, ZK is trading at $0.05275, up 53.9% in seven days.

ZK's core positioning is as the "value carrier and governance credential" of the zkSync network, aiming to achieve both privacy protection and scalable application by empowering the Ethereum Layer2 ecosystem.

ZK's rally started last Friday when ZKsync founder Alex Gluchowski announced the launch of the Atlas upgrade and highlighted institutional-grade scalability, interoperability, and transaction speed as its key features. Gluchowski stated that this update allows Layer-2 protocols, upon deployment, to rely on Ethereum for liquidity and new institutional capital inflows, cross-chain transactions, and asset tokenization.

Vitalik showed support for zkSync, noting: "ZKsync has done a lot of underrated but very valuable work in the Ethereum ecosystem. Great to see them shipping this product!" "Immutability is Ethereum's most important property."

II. What's Driving the Privacy Coin Surge?

1. Regulatory Drivers
   Cryptocurrencies are facing ongoing surveillance, including Know Your Customer (KYC) checks, exchange monitoring, and advanced blockchain analysis techniques. For example: blockchain forensics experts use machine learning to track wallets and build behavioral profiles. Their systems can correlate identities, map connections between wallets, and predict when assets might be moved to exchanges.

Governments are also tightening control. On August 18, the U.S. Treasury Department sought public comment on artificial intelligence, blockchain monitoring, digital identity credentials, and "privacy-enhancing tools" for detecting illicit activity involving digital assets. The agency said this feedback would inform new guidelines and potential rules under the GENIUS Act.

In the EU, cryptocurrency exchanges must treat transfers to or from self-custodied wallets as high-risk transactions and apply enhanced due diligence measures, including verifying wallet control. These rules took effect on December 30, 2024.

As governments weigh using intrusive tools to monitor network activity and companies collect more data, privacy technology is being redefined as a market opportunity.

2. Halving Expectations
   David Duong, Head of Investment Research at Coinbase, posted that Zcash is expected to undergo a halving in November 2025. As the halving occurs, Zcash's issuance is projected to drop significantly, pushing its implied inflation rate from double digits in the early 2020s to single digits by the late 2020s. ZEC's block reward halves every four years. The current block reward is 3.125 ZEC, which will drop to 1.5625 ZEC after the next halving, expected to reduce the daily supply by approximately 1,500 ZEC. This market movement can be seen as an early reaction to the anticipated "halving effect."

3. Institutional Entry
   In October, a16z's latest crypto report pointed out that privacy protection is returning to focus and could become a prerequisite for mass adoption. Signs of increased attention include: a surge in Google searches related to crypto privacy in 2025; the growth of Zcash's shielded pool supply to nearly 4 million ZEC; Railgun's monthly transaction volume surpassing $200 million. Simultaneously, the Ethereum Foundation established a new privacy team; Paxos partnered with Aleo to launch a private and compliant stablecoin (USAD); the Office of Foreign Assets Control (OFAC) lifted sanctions on the decentralized privacy protocol Tornado Cash. They anticipate this trend will gain more momentum in the coming years as crypto technology continues to mainstream.

III. Can This Round of Privacy Coin Rally Last?

In October, Hayes made a bullish prediction for ZEC. The price of Zcash soared from $272 to a peak of $355 within hours, outperforming all other tokens in the top 50 by market cap during the same period. Cryptocurrency trader AB Kuai Dong noted that an endorsement from a "legendary Silicon Valley investor" prompted "everyone to follow the trend and jump in, subsequently triggering a full month of FOMO market frenzy."

In the short term, this round of privacy coin price increase is related to factors such as market sentiment, halving expectations, and policy drivers. However, in the long run, factors like real-world application scenarios and policy directions are the fundamental determinants of the privacy coin market.

Currently, privacy coins account for only 11.4% of global cryptocurrency transactions, and their market share growth rate is insufficient to significantly impact the overall crypto market. But the underlying technologies – ring signatures, stealth addresses, zero-knowledge proofs – have the potential to revolutionize the mainstream perception of financial privacy.