Privacy coins crushing blue chips

 Strong run continues apace

Two weeks ago, we explored the background of why privacy crypto coins were doing so well. We didn't expect their stellar rises to have continued, here is the one-month performance vs BTC (black line):

ZCash has since risen 106% vs BTC's 4%, on a one-year horizon, its performance is a jaw dropping 29x:

All of this highlights how screwy the world has become, and the relentless poking at the people's private financial affairs by the bankrupt govts is driving more money underground...

In view of this new trend, we heartily recommend you read an excellent primer comparing the big two privacy coins: Monero vs Zcash (Article 3), and which one might be suited to your needs.

Weaponisation of Stablecoins

As we have half expected, as soon as govts lay their hands on the levers of control, they cannot resist pulling them. And how hard they did this time, whether maliciously or willfully, against some unsuspecting genuine userss.

The whole sordid story is painfully laid out in Article 2, chronicaling how Tether froze USDT wallets at government request, without warrant or court sanctions. Basicallyl Tether (or other regulated stablecoin issuers) are now the 'legal' way through which governments could not constitutionally do by themselves!

Decentralised Stables the way forward?

In view of this alarming development, may be all our future stable holdings will need to go decentralised... Luckily in the self executing protocol space, and with reasonable liquidity, we have Ethena (USDe) and DAI to fall on:

Both are trading on as narrow 90-day volatility ranges as Tether, and both have well over 3 years of track record. Perhaps these will now become the privacy coin equivalent of winners in the stablecoin space as self protecting users also flee the potential tyranny and confiscation they might be subjected to?

A scary summary of the above dystopian Tether incident is summarised well in this schematic:

Perhaps freedom loving Americans need to find ways to reverse this quick or they will be no different from the average East German under Stasi?

Some good news amongst the doom and gloom

The good news however, is that crypto at large do seem to have caught their cyclical bottom as we highlighted in an earlier technical analysis reprot - one of which we did not include is added here:

a sign we may have bottomed out this cycle?

In fact, looking at more technicals, that does indeed suggest so:

BTC may hit $97k (+13%) within weeks

Bitcoin could even trashing the AI infussed S&P:

hitting trend top suggest 90+% outperformance vs S&P by early 2027

There are champions of personal freedoms out there

Despite the ever encrouching state, it is not all grim ahead, we see liberty championing crypto natives starting to fight back, eg billionaire Ben Delo (see his fascinating, even inspiring story in Article 1).

Article 1: Reform’s £36m donor Ben Delo: Oxford-educated crypto king who was thrown out of three primary schools, pardoned by Trump and became UK’s youngest self-made billionaire

Article 2: How the government is using Tether to build the financial component of the surveillance state

Article 3: Monero vs Zcash: Which Privacy Coin Wins in 2026?

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 ​​​