Is this the start of the Privacy Crypto era?

 

A curious phenomenon has been playing out in crypto land of late... that of the consistent rally of privacy coins, irrespective of the directoin main blue chips have taken, e.g. Monero and Zcash amongst the top 15 coins: Zcash (ZEC) is up a stellar 147% in one month, vs 22% for BTC and 31% for ETH. The wild west turned the big tax hunt / admin takeover The above performance difference could be explained by how in the past, when all of crypto was like alien technology to the technocrats, free markets ruled, and the rapid adoption resulted in the astronomical rise in prices (green arrow for BTC price), as a result, the idealists more insistent on total privacy were left in the dust (blue dotted arrow): In recent months, however, due to increasingly harsh reporting and tax regulations, put in by bankrupt governments desperate for any source of revenue, and the worsening of geopolitics, the importance of privacy has been rediscovered - we surmise that there has been a major outflow of transparent BTCs/ETHs positioning for a much more tyrannical regulatory environment to come, driving the current massive outperformance of privacy coins (blue solid arrow). Given how early we are in this development (barely over 1 year), there is every chance that this run will continue, even exceeding the previous highs achieved back in 2018 - in other words, Monero (XMR above) could outrun BTC by a factor of 5x over the next 2-3 years? The picture is similar for the other big privacy coin ZEC: Cramping of economic freedom becoming vicious As governments lose ability to fund their forever deficits through bond markets (see our bond report a few days ago) and the escape from fiat gains pace - in part due to how punishing their AML/KYC craziness have reached - they started limiting the real world privacy coin that we all already use: Cash. One recent example is Spain (article 5), but don't be surprised to see similar edicts having been rolled out in other OECD ex-growth jurisdictions. While they crimp the use of cash as the ultimate free means of citizens spending their money, the bureaucrats in Brussells are hard at work bringing in their Central Bank Digital Currency (CBDC), so they can completely disintermediate the banks (which are private and sometimes not easy to control), and gain total manipulation at the whim of these central planners: The genuine risks of CBDC include: government could trace transactions, impose expiration dates on money, restrict purchases, enforce negative interest rates, collect taxes automatically, or prevent funds from being transferred beyond approved limits. (article 4) Despite President Trump's prohibition for the Fed to issue CBDC (article 4), the bought politicians on the Hill sneaked in a sunset clause that will bring it back end of 2030. This is the macro back drop against which the privacy coins are rallying? Quick Intro to Privacy Coins As cash gets banned, money transfers gets limited (you must have been asked by your banks: who are you sending this to? what are you doing with it? etc.), and traceable cryptos get hoovered up in the regulatory black hole, moree and more people will want a 3-prong way to preserve their financial privacy - cash for daily spend, gold for localised asset protection, and privacy coins for cross border anonymous transactions? To ease your effort to come up the curve, we have attached some reading covering various aspects of this interesting segment: Articles 1-3. A quick summary of ours puts some key metrics in one table: In the medium to long term, when physical cash gets nudged out, perhaps the digital equivalent of cash (will not be stablecoins or even bitcoins, as they are monitored and controlled) will be privacy coins. One rough way to assess their upside potential is none other than their weighting in current total crypto values (red line below), and that is a fraction of cash's weighting against all ready access money (blue line). If the red line does take over, the upside could be in the 1000x on current metrics (green area): Time to start HODLing privacy coins? If you think ahead enough, you may already be hodling privacy coins (and not letting anyone know about it). As an investment concept, it can do very well based on a combination of rebalancing strategies: For example, if you rebalanced a 5-coin portfolio every 5 weeks from start of 2017 to now, your return would have been 48x... But going forward, as transparent cryptos (BTC, ETH, etc) get hunted down, perhaps better returns can be had in this still niche and undiscovered corner of cryptoverse? ​ ​ Article1 : Best Privacy Coins 2026: Top 7 Ranked & Compared ​Article 2: Best Privacy Coins in 2026 ​Article 3: Best Privacy Crypto: Coins, Protocols and Apps Ranked ​​Article 4: The CBDC Ban Expires with the Economic Confidence Model in 2030​ Article 5: Spain limits ATM withdrawals ​​​