Author: Eric, Foresight News
Every bull market has its signs of ending. Looking back, among these signs, the sudden explosion of privacy tokens has never been absent.
This recurring phenomenon has the same reason each time: there's nothing left to hype. After all concepts and narratives have been exhausted, the final dance of capital usually chooses "privacy," a topic that has persisted since 2014.
Hype around privacy at the end of a bull market has logical rationality. After experiencing the noise, many people often suddenly realize, in the void of the bull-to-bear transition, what the original intention of Web3 was, then shout about making privacy and decentralization great again—but the result is just another round of speculation.
Although the process is the same, the triggers each time are not entirely identical.
2017 was the heyday of privacy tokens because there were no impressive DApps, and the sector was still in a phase of finding direction. Back then, ZEC, XMR, and DASH were absolute "hot stars," with discussion levels even surpassing Bitcoin. ZEC and XMR were launched with the "technological innovations" of zero-knowledge proofs and ring signatures, respectively, while DASH combined PoW and PoS.
Readers who didn't experience that period might not understand the market's fervor for such tokens at the time. Back then, whether Bitcoin was the absolute core of cryptocurrency was controversial; many such tokens charged ahead under the banner of "better Bitcoin." ZEC's price once surged to $30,000 in early 2018, while Bitcoin's peak price in that cycle was less than $20,000.
Late 2021 and early 2022 were purely about forcing the privacy concept. After experiencing DeFi, NFT, and the metaverse, projects including Aleo received hundreds of millions in funding, with SoftBank, a16z, and Tiger Fund among the investors. The market at that time briefly believed that after the application explosion, privacy could finally move from concept to practical implementation.
Perhaps because everyone was making money and was euphoric, no one truly cared whether privacy was a mass need, or even if there was demand, whether demanders were willing to bear significant costs just to ensure privacy. The result was that it landed—but face-first.
In this cycle, the rise of privacy tokens represented by ZEC began in September 2025. Looking back, it's hard to pinpoint any specific reason at that time to explain why it rose 20 times in three months. If we must find a reason, it might be because it was "not so compliant."
2025 can be said to be the year cryptocurrency was fully legitimized. Multiple countries in Europe and America successively introduced regulatory laws. Even supporting cryptocurrency development couldn't escape scrutiny under regulations like identity verification and anti-money laundering—DeFi was no exception. Thus, although cryptocurrency was no longer considered a security, it essentially wasn't much different from trading securities. Government scrutiny of individuals didn't relax at all; it only temporarily eased regulations on projects and institutions to avoid hindering innovation.
Additionally, the arrest of fraudster Qian Zhimin in the UK, and later the exposure of Chen Zhi whose Bitcoin was confiscated, revealed an open secret: although only you hold the private key, it's not difficult for law enforcement to make you hand it over. When this fact is laid bare again, it might trigger some investors to switch to privacy tokens.
But including BitMEX co-founder Arthur Hayes's shilling and a16z's mention of "privacy as a service" all happened after November. Judging from the price trend, this seems more like cover for dumping rather than driving the rise. XMR might have held on for two more months due to reasons like Iranian officials fleeing with funds or hackers who stole hundreds of millions in Bitcoin converting it to XMR, but it also peaked and fell rapidly.
Although we can't definitively say the bull market is over now, at least at the end of the last bull market, there were no shortage of well-known figures and institutions shilling privacy. The extremely similar plot should at least make us more vigilant.
The privacy concept has persisted from 2014 to today without dying out because it genuinely meets some gray demands, but it conflicts with actual "privacy" needs. In reality, what most people recognize as privacy protection isn't making data completely untraceable, but more about not being easily exposed. In financial transactions, dark pools exist to prevent large capital actions from affecting the market or being targeted by other funds, but this doesn't mean the transaction information itself can't be verified.
The privacy concept in Web3 is sometimes overly extreme. Zcash's privacy transactions are optional, while XMR is private by default—sender, receiver, and amount can't be verified on-chain, which is also the core reason XMR was delisted by over 70 global cryptocurrency exchanges in 2025. For most people, there seems to be insufficient reason to use XMR to hide traces. Moreover, the process of buying XMR itself is traceable; when you buy XMR, you might be suspected of engaging in illegal activities.
Simply put, most people just want their behavioral records protected and respected, not completely hidden; regulatory agencies especially cannot accept channels almost tailor-made for money laundering. With current technology, anonymous on-chain transfers of USDT are also achievable, so there's really not much reason to use a targeted asset just for privacy.
Web3 has been talking about privacy for over 10 years but seems to always avoid the question: "What level of privacy do we actually need?" Without finding real scenarios, privacy tokens may forever be the last bagholders in sector rotation.
