Share
Share this article
Copy linkX (Twitter)LinkedInFacebookEmail
Markets
Share
Share this article
Copy linkX (Twitter)LinkedInFacebookEmail
Experts tip privacy tokens to continues outp
Markets
Share
Share this article
Copy linkX (Twitter)LinkedInFacebookEmail
Experts tip privacy tokens to continues outp
Experts tip privacy tokens to continues outperforming in 2026
Experts tip privacy tokens to continues outperforming in 2026
Analysts believe privacy tokens such as zcash and monero will continue to outperform this year, but they will likely face delisting risks and conflicts with banks over regulatory issues.
By Olivier Acuna|Edited by Oliver Knight
Updated Jan 7, 2026, 4:33 p.m. Published Jan 7, 2026, 4:33 p.m.
Make us preferred on Google
Privacy tokens outperformed all other cryptocurrencies last year and are poised to continue the trend in 2026. (Photo: Shutterstock, modified by CoinDesk)
What to know:
- Privacy-focused cryptocurrencies have outperformed the market, driven by increasing demand for financial anonymity amid tightening regulations.
- Analysts warn that while privacy coins are gaining traction, they face significant regulatory challenges that could impact future gains.
- The trend towards privacy in crypto is expected to continue, with privacy-preserving systems becoming more essential as blockchain adoption grows in regulated environments.
Privacy-focused cryptocurrencies could extend their market outperformance into 2026, according to analysts and researchers, however, the very forces driving demand could also trigger an inevitable regulatory reckoning.
In a year-end report, Kucoin said that Privacy coins led the crypto market’s top performers last year, with ZEC, XMR, and DASH, including bitcoin, ether and XRP. ZCash’s ZEC rallied 861%, Monero’s XMR rose by 123% and Dash’s DASH, 12%.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
Sign me up
Privacy coins outperformed last year as growing concerns over blockchain surveillance and financial traceability pushed users back toward assets designed to function as digital cash. Renewed adoption of privacy features, particularly on networks like Zcash and Monero, coincided with wallet upgrades that made private transactions easier and more accessible, helping expand anonymity sets at a time when broader crypto markets struggled under macro and ETF-driven pressures.
However, while experts believe they will continue to outperform this year, many of them, Kucoin said, “analysts warn regulatory risks and macro pressures could affect future gains.” The thesis is that as regulation tightens and blockchain surveillance expands, financial privacy is shifting from an ideological preference to a functional requirement.
Markets are rewarding privacy tokens
“Privacy coins are a growing narrative because financial privacy is becoming a structural requirement as blockchain adoption matures and regulations tighten,” Jason Fernandes, market analyst and co-founder of Adlunam told CoinDesk. “Markets are rewarding protocols that embed privacy at the base layer as opposed to traditional transparency-first models.”
That view aligns with Grayscale’s Crypto Sectors Quarterly: A Preference for Privacy report, which found that privacy-oriented assets outperformed all other crypto sectors in Q4 2025 despite broadly negative market returns. Grayscale argued that demand for confidentiality is increasingly influencing capital allocation, particularly as regulatory oversight intensifies across major jurisdictions.
The forward-looking case has also gained traction among venture investors. In a post on X, a16z Crypto described privacy as a core pillar of the next phase of crypto infrastructure, arguing that as blockchains scale into regulated environments, demand for privacy-preserving systems is likely to intensify rather than fade.
Grayscale’s longer-term outlook suggests the trend may persist. In its 2026 Digital Asset Outlook, the firm positioned privacy-enhancing technologies as part of the infrastructure likely to benefit from deeper institutional and regulatory engagement with crypto, an acknowledgment that privacy may grow more relevant, not less, as the asset class matures.
Still, analysts caution that rising interest may invite sharper scrutiny. Fernandes warned that AML and KYC constraints, particularly around off-ramps, remain the sector’s biggest vulnerability.
A core pillar of the next phase in crypto
The regulatory backdrop is shifting. In Europe, for example, the rollout of the Anti-Money Laundering Authority (AMLA) and the phased implementation of the Markets in Crypto-Assets (MiCA) framework have sharpened scrutiny around asset traceability, exchange banking relationships and transaction monitoring. While privacy coins are not explicitly banned under MiCA, compliance obligations on custodians, payment processors and banks have raised questions about how long exchanges can continue supporting privacy-focused assets without facing indirect pressure, particularly when fiat off-ramps are involved.
Still, Fernandes warned that AML and KYC constraints, particularly around off-ramps, remain the sector’s biggest vulnerability.
‘The greater the interest, the greater the scrutiny’
“You can only fly under the radar for so long,” Fernandes said. “The greater the interest, the greater the scrutiny. Sooner or later, regulators will reach out and say, ‘You can’t bank with that exchange if you list zcash.’ Exchanges have limited options for payment processors, and banks can exert enormous influence.”
Fernandes also said privacy assets may benefit from regulation in the short term, but face an unavoidable showdown. “As the EU introduces increasingly draconian regulations, privacy coins are only going to be more interesting to people. But that also sets the stage for their inevitable confrontation with regulators.”
Despite those risks, Fernandes sees demand rising.
“Retail interest increasing is inevitable given regulations are ever expanding,” he said. “The real question is how privacy coins fare once regulators turn their full attention to them.”
Industry figures have echoed those concerns from a different angle. Arthur Hayes argued that rising geopolitical tension and expanding financial surveillance make privacy tools increasingly relevant, while also warning that greater visibility and usage could draw intensified regulatory attention, reinforcing the sector’s long-running tension between utility and compliance.
‘Winners won’t be the loudest privacy coins’
Mati Greenspan, founder of Quantum Economics, framed privacy’s resurgence as a reaction to blockchain transparency itself. “Privacy coins are outperforming because transparency became overused as a control layer,” Greenspan said. “When everything is traceable, privacy shifts from philosophy to utility.”
Greenspan told CoinDesk that expanding surveillance on public blockchains is likely to keep capital flowing into privacy assets. “There’s a narrative-of-the-day component to the trade, but it isn’t just hype. The narrative sticks because it’s anchored in a real structural shift.”
Looking ahead, both analysts agree that not all privacy tokens will benefit equally. “In 2026, the winners won’t be the loudest privacy coins,” Greenspan said, “but the ones that balance strong privacy with usability, liquidity, and regulatory resilience. When transparency becomes mandatory, privacy gets repriced.”
Privacy Tokenscrypto market
More For You
KuCoin Hits Record Market Share as 2025 Volumes Outpace Crypto Market
Commissioned byKuCoin
KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
View Full Report
More For You
Tokenization 'supercycle' set to drive crypto’s next leg higher in 2026: Bernstein
After a choppy end to 2025, Wall Street broker Bernstein said crypto markets have likely bottomed and it sees a broad-based tokenization boom reshaping finance.
What to know:
- Bernstein expects a tokenization 'supercycle' in 2026 spanning stablecoins, capital markets and prediction markets.
- The broker reiterated its $150,000 bitcoin forecast for 2026 and $200,000 as its peak 2027 cycle target.
- Coinbase, Robinhood and other crypto-linked equities are seen as key beneficiaries.
Read full story
Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact service@support.mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.
You May Also Like
Momentous Grayscale ETF: GDLC Fund’s Historic Conversion Set to Trade Tomorrow
BitcoinWorld Momentous Grayscale ETF: GDLC Fund’s Historic Conversion Set to Trade Tomorrow Get ready for a significant shift in the world of digital asset investing! A truly momentous event is unfolding as Grayscale’s Digital Large Cap Fund (GDLC) makes its highly anticipated transition into a spot crypto exchange-traded fund. This isn’t just a name change; it’s a pivotal moment for the broader cryptocurrency market, bringing a new era of accessibility and institutional participation through the Grayscale ETF. What’s Happening with the Grayscale ETF Conversion? Tomorrow marks a historic day for Grayscale’s Digital Large Cap Fund (GDLC). This existing spot crypto basket is officially scheduled to begin trading under its new identity: the Grayscale CoinDesk Crypto5 ETF. This exciting development comes directly after the U.S. Securities and Exchange Commission (SEC) gave its stamp of approval to Grayscale’s application for this conversion. As Bloomberg ETF analyst Eric Balchunas highlighted, this move has been keenly watched. The approval and subsequent launch underscore a growing acceptance of crypto-backed financial products within traditional markets. For investors, this conversion of the Grayscale ETF represents a more streamlined and regulated way to gain exposure to a diversified basket of large-cap digital assets. Why is the Grayscale ETF a Game-Changer for Investors? The conversion of GDLC into a Grayscale ETF offers several compelling benefits, fundamentally changing how investors can access the crypto market. Firstly, ETFs are known for their ease of trading. They can be bought and sold on traditional stock exchanges, just like company shares, making them incredibly accessible to a wider range of investors who might be hesitant to directly hold cryptocurrencies. Consider these key advantages: Enhanced Accessibility: Investors can gain exposure to a diversified crypto portfolio without needing to set up crypto wallets or manage private keys. Increased Liquidity: Trading on major exchanges typically means higher liquidity, allowing for easier entry and exit points. Regulatory Oversight: As an SEC-approved product, the Grayscale ETF operates under a regulated framework, potentially offering greater investor protection and confidence. Diversification: The Grayscale CoinDesk Crypto5 ETF tracks a basket of large-cap cryptocurrencies, offering immediate diversification rather than exposure to a single asset. This development is a strong indicator of the maturation of the digital asset space. It signals a bridge between the innovative world of crypto and the established financial system. Navigating the New Grayscale ETF Landscape While the launch of the Grayscale CoinDesk Crypto5 ETF brings exciting opportunities, it’s also important for investors to understand its implications. The shift from a closed-end fund structure (GDLC) to an open-ended ETF means that the fund’s shares can now be created and redeemed daily. This mechanism helps keep the ETF’s market price closely aligned with the net asset value (NAV) of its underlying holdings. Historically, closed-end funds like GDLC could trade at significant premiums or discounts to their NAV. The ETF structure is designed to mitigate these discrepancies, providing a more efficient pricing mechanism. This change offers a more transparent and potentially less volatile investment experience for those looking to invest in a Grayscale ETF. What’s Next for Crypto ETFs and Grayscale? The successful conversion and launch of the Grayscale CoinDesk Crypto5 ETF could pave the way for similar transformations of other Grayscale products. It also sets a precedent for how existing crypto investment vehicles might evolve to meet market demand for regulated, accessible products. The increasing number of spot crypto ETFs, including this new Grayscale ETF, reflects a growing institutional appetite for digital assets. This trend suggests a future where cryptocurrency investing becomes an even more integrated part of mainstream financial portfolios. As regulatory clarity continues to improve, we can anticipate further innovation and expansion in the crypto ETF landscape, offering investors diverse options to participate in the digital economy. The launch of the Grayscale CoinDesk Crypto5 ETF is more than just a new product; it’s a testament to the persistent efforts to bring digital assets into the mainstream financial fold. By offering a regulated, accessible, and diversified investment vehicle, Grayscale is not only expanding opportunities for investors but also reinforcing the legitimacy and staying power of the crypto market. This momentous step truly reshapes the investment landscape, making it easier for a broader audience to engage with the exciting potential of cryptocurrencies through a trusted Grayscale ETF. Frequently Asked Questions (FAQs) What is the Grayscale CoinDesk Crypto5 ETF? The Grayscale CoinDesk Crypto5 ETF is the new name and structure for Grayscale’s former Digital Large Cap Fund (GDLC). It’s a spot crypto basket that holds a diversified portfolio of large-cap digital assets, now trading as an exchange-traded fund. When will the Grayscale ETF begin trading? The Grayscale CoinDesk Crypto5 ETF is scheduled to begin trading tomorrow, following its approval by the U.S. Securities and Exchange Commission (SEC). How does an ETF differ from the previous GDLC fund? As an ETF, the fund’s shares can be created and redeemed daily, which helps keep its market price closely aligned with the value of its underlying assets. The previous GDLC fund was a closed-end fund that could trade at significant premiums or discounts to its net asset value. What are the benefits of investing in the Grayscale ETF? Benefits include enhanced accessibility (trading on traditional exchanges), increased liquidity, regulatory oversight by the SEC, and immediate diversification into a basket of large-cap cryptocurrencies. Is the Grayscale ETF suitable for all investors? While the Grayscale ETF offers a regulated and accessible way to invest in crypto, all investments carry risks. Investors should conduct their own research and consider their financial goals and risk tolerance before investing in any ETF, including this Grayscale ETF. Did you find this article informative? Share this exciting news about the Grayscale ETF conversion with your friends, family, and fellow investors on social media to keep them informed about the latest developments in the crypto world! To learn more about the latest crypto market trends, explore our article on key developments shaping Bitcoin and Ethereum price action. This post Momentous Grayscale ETF: GDLC Fund’s Historic Conversion Set to Trade Tomorrow first appeared on BitcoinWorld.
Share
Coinstats2025/09/19 17:45
The UA Sprinkler Fitters Local 669 JATC – Notice of Privacy Incident
Landover, Maryland, February 6, 2026– The UA Sprinkler Fitters Local 669 Joint Apprenticeship and Training Committee (“JATC”) is providing notice of an event that
Share
AI Journal2026/02/07 07:30
Vitalik Buterin Reveals Ethereum’s (ETH) Future Plans – Here’s What’s Planned
The post Vitalik Buterin Reveals Ethereum’s (ETH) Future Plans – Here’s What’s Planned appeared on BitcoinEthereumNews.com. Ethereum founder Vitalik Buterin presented the network’s new roadmap, which includes its short-, medium-, and long-term goals, at the Developer Conference held in Japan today. Scalability, cross-layer compatibility, privacy, and security were the prominent topics in Buterin’s speech. Buterin stated that the short-term focus will be on increasing gas limits on the Ethereum mainnet (L1). He said that tools such as block-level access lists, ZK-EVMs, gas price restructuring, and slot optimization will be used in this context. The goal is to maintain the network’s decentralization while increasing scalability. The medium-term goal is to enable trustless asset transfers between Layer-2 (L2) networks and achieve faster transaction finality. In this context, “Stage 2 Rollup” solutions, proof-of-conduct combinations, and optimizations for reading data from L1 are on the agenda. Furthermore, network optimizations such as shortening slot times, fast finality protocols, and erasure coding are planned to improve user experience and security. Buterin emphasized that privacy is a priority for both the short and medium term. Zero-knowledge (ZK) proofs, anonymous pools, encrypted voting, and scrambling network solutions are highlighted to protect the privacy of users’ on-chain payments, voting, DeFi transactions, and account changes. Furthermore, secure execution environments, secret query techniques, and the ability to conceal fraudulent requests and data access patterns are also targeted when reading data from the chain. Buterin’s long-term vision highlights a minimalist, secure, and simple Ethereum. This roadmap includes resistance to the risks posed by quantum computers, securing the protocol with mathematical methods (formal verification), and transitioning to ideal cryptographic solutions. Buterin stated that these strategic steps will transform Ethereum into a more scalable, user-friendly, and secure infrastructure. With the strengthening of L2 networks, more users will be able to use Ethereum with less trust assumptions. The ultimate goal is for Ethereum to become a reliable foundational infrastructure for global…
Share
BitcoinEthereumNews2025/09/18 15:57