Author: Eric, Foresight News

Every bull market's end has some signs. Looking back, among these signs, the sudden surge of privacy tokens is never absent.

The reason behind this recurring phenomenon is the same: there’s nothing left to speculate on. When all concepts and narratives have lost their speculative space, the last dance of capital usually chooses "privacy," a topic that has persisted since 2014.

It is logically reasonable to speculate on privacy at the end of a bull market. After the noise, many people often suddenly realize what the original intention of Web3 is amidst the void of bull and bear transitions, and then shout to make privacy and decentralization great again, but the result is just another round of speculation.

Although the process is the same, the triggering conditions for each round are not entirely the same.

2017 was considered the heyday of privacy tokens, as there were no standout DApps, and the industry was still in the stage of finding direction. At that time, ZEC, XMR, and DASH were absolute "hot commodities," with discussions even surpassing Bitcoin. ZEC and XMR emerged with "technological innovations" of zero-knowledge proofs and ring signatures, while DASH combined PoW and PoS.

Readers who did not experience that time may not understand the level of market enthusiasm for such tokens. At that time, whether Bitcoin was the absolute core of cryptocurrency was controversial, and many tokens charged in under the banner of "better Bitcoin." The price of ZEC soared to $30,000 in early 2018, while Bitcoin's highest price in that cycle was less than $20,000.

The end of 2021 and the beginning of 2022 saw a complete hard speculation on the privacy concept. After experiencing DeFi, NFTs, and the metaverse, projects including Aleo raised over a hundred million dollars in funding, with investors including SoftBank, a16z, and Tiger Global. At that time, the market briefly believed that after a massive application explosion, privacy could finally move from concept to practical implementation.

Perhaps because everyone was making money and got carried away, no one truly cared whether privacy was a necessity for the masses, nor did anyone care whether, even if there was demand, the demand side was willing to invest considerable costs just to ensure privacy. The result was that while it was implemented, it was a face-first landing.

In this cycle, the rise of privacy tokens represented by ZEC began in September 2025. Looking back, it is difficult to pinpoint any specific reason to explain why it increased 20 times in three months. If one had to find a reason, it might be because it was "not so compliant."

2025 can be said to be the year when cryptocurrency was comprehensively regulated. Several countries in Europe and America successively introduced regulatory bills. Even those supporting the development of cryptocurrency could not escape scrutiny regarding identity verification and anti-money laundering regulations, and DeFi was no exception. As a result, although cryptocurrency was no longer considered a security, it was essentially no different from trading securities. Government scrutiny of individuals was not relaxed at all; it was only temporarily eased for project parties and institutions to avoid hindering innovation.

Additionally, the arrest of fraudster Qian Zhimin in the UK, along with the subsequent revelation of confiscated Bitcoin from Chen Zhi, revealed an unspoken truth: although you hold the private key, it is not difficult for law enforcement to make you hand it over. When the facts are once again laid before us, it may trigger some investors to shift to privacy tokens.

However, various events, including BitMEX co-founder Arthur Hayes' calls and a16z's mention of "privacy as a service," all occurred after November. From the market trend, this seems more like a cover for offloading rather than a driving force for an increase. XMR may have held up for another two months due to capital flight from Iranian officials and hackers converting stolen hundreds of millions of dollars in Bitcoin to XMR, but it also quickly fell back after a spike.

While it cannot be definitively concluded that the bull market has ended, at least at the end of the last bull market, there were many well-known figures and institutions calling for privacy, and the extremely similar plot should at least raise our vigilance.

The reason the concept of privacy has persisted since 2014 is that it genuinely meets certain gray demands, but it contradicts the actual demand for "privacy." In reality, most people's understanding of privacy protection is not about making data completely untraceable, but rather about not easily exposing it. There is also the concept of dark pools in financial transactions, aimed at ensuring that large capital movements do not affect the market or get targeted by other capital, but this does not mean that the information of the transactions themselves cannot be verified.

The concept of privacy in Web3 is sometimes excessively extreme. Zcash's private transactions are optional, while XMR is default privacy, where the sender, receiver, and amount cannot be verified on-chain. This is also the core reason why XMR was delisted from over 70 cryptocurrency exchanges globally in 2025. For most people, there seems to be insufficient reason to use XMR to hide their tracks; furthermore, the process of purchasing XMR itself is traceable, and when you engage in purchasing XMR, you are likely to be seen as engaging in some illegal activities.

In simple terms, most people just want their behavioral records to be protected and respected, rather than completely hidden; regulatory agencies are even less able to accept a channel that is almost tailor-made for money laundering. With current technology, achieving on-chain anonymous transfers of USDT is also possible, so there is really not much reason to use an asset that is under scrutiny solely for privacy.

Web3 has been discussing privacy for over a decade, yet it seems to always avoid the question of "what level of privacy do we actually need," failing to find a real scenario. Privacy tokens may forever be the last resort in the rotation of sectors.

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