Zcash Overtaking Monero Market Cap Points to Privacy-Coin Power Shift

Zcash ZEC$408.67, a privacy-focused cryptocurrency, overtook monero XMR$404.47, the sector's longtime dominant token, in market capitalization in what may represent a changing of the guard.

ZEC's market cap overtook XMR's for the first time on Friday, sitting above its older peer for several hours after climbing almost 50% in seven days. It held that position for most of the weekend, climbing as high as $7.2 million while XMR stayed around $6.3 billion. The two were recently valued at similar levels around $6.4 billion.

While traders cited technical measures, such as soaring trading volumes and a technical breakout from long-term resistance as immediate catalysts for ZEC’s rally, fundamental factors may also be at play.

One key difference between zcash, which started up in 2016, is its optional-privacy model. Users are able to choose between transparent and shielded transactions, a facility that monero, introduced in 2014, lacks. That flexibility may be helping ZEC win support from traders and institutions seeking privacy without the regulatory baggage that has weighed on XMR, which remains delisted from several major exchanges.

"Unlike monero, which will likely remain unavailable on major Western-regulated exchanges, zcash offers flexibility, with optional privacy that can be activated when needed," Ray Youssef, CEO of the peer-to-peer crypto (P2P) app NoOnes, said in an interview over email.

"This gives institutions room to maintain compliance and reporting, making ZEC a regulatory-acceptable asset, while XMR remains toxic from an AML and KYC compliance perspective," he said referring to anti-money laundering and know-your-customer requirements.

There's also Zashi CrossPay, a privacy-preserving cross-chain payment protocol, that has positioned zcash as a potential privacy layer for broader crypto networks such as Bitcoin and Ethereum.

Zcash's recent gains form part of a longer-term boom in its price, which jumped nearly 1,000% in the last three months, CoinDesk data show. Monero, meanwhile, rose just 11.5%.

Another factor behind ZEC's outperformance could be the influence of crypto analyst and commentator Arthur Hayes, who has predicted zcash reaching $10,000 per coin in numerous posts on X over the last week. Hayes is a noted figure in the crypto industry for his bold and sometimes contrarian views.

CORRECTION (Nov. 5, 08:40 UTC): Removes reference to Zcash's next block halving being in November this year - it is in November 2028.