The growing demand for financial privacy among investors is driving the prices of privacy-focused cryptocurrencies to soar, indicating a noticeable resurgence of interest in self-sovereign blockchain transactions.
Data aggregation platform CoinGecko shows that the market capitalization of privacy-focused cryptocurrencies surged by about 80% in the past week, briefly surpassing $24 billion on Monday morning, before slightly retreating by 2.9% to $23.7 billion at the time of writing.
Among privacy coins, DASH and Zcash (ZEC) performed particularly well last week, recording increases of 65% and 9.55%, respectively.
Notably, this surge in privacy coins occurred while the broader crypto market was in a downward trend. Over the past week, the total market capitalization of the crypto market fell by 3.7% from $3.96 trillion to $3.81 trillion, starkly highlighting the rapid growth in investor demand for financial privacy.
Compared to pseudonymous cryptocurrencies like Bitcoin (BTC), privacy coins such as Zcash and Monero (XMR) can effectively conceal the sender, receiver, and transaction details, providing a higher level of anonymity.
Jake Kennis, a senior research analyst at Nansen, pointed out in an interview with Cointelegraph: "Privacy is increasingly being seen as a necessity rather than just a feature. This has reignited the market's ideological demand for private, self-sovereign transactions."
Kennis noted that the expansion of Zcash's shielded pools and technological upgrades, including the Zashi wallet that supports shielded transfers and Solara integration, are making privacy transactions more convenient and accessible.
He further added that Zcash, with its fixed supply cap of 21 million coins, proof-of-work (PoW) consensus mechanism, and privacy settings based on zk-SNARK technology, is viewed as the "crypto version" of BTC by investors seeking private transactions.
Zk-SNARKs are a cryptographic primitive that can sever any traceable data fragments between parties on a public blockchain network, aimed at enhancing digital privacy protection. This technology is an interactive implementation of zero-knowledge proof technology.
Last Friday, the price of Zcash soared to $388, setting a new historical high of over eight years, briefly surpassing Monero to become the highest market-cap privacy coin.
This historical peak came just days after BitMEX co-founder Arthur Hayes predicted that the price of Zcash would reach $10,000, further boosting the market enthusiasm for the token.
Cointelegraph reported that within hours of Hayes' bullish prediction on Sunday, the price of Zcash quickly climbed from $272 to a peak of $355.
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Original article: “Privacy Coins Surge 80%, Crypto Investors Shift from Public to Anonymous Transactions”
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