Privacy-focused cryptocurrencies are leading Tuesday’s market declines, with Monero and Zcash dropping roughly 8% each. According to industry analysis, the sector’s slump is driven by a combination of general risk-off sentiment and specific regulatory pressure on privacy assets. This trend is reflected in broader category data, which shows privacy coins falling an average of 5.8% on the day.
Privacy-focused cryptocurrencies led losses across the digital asset market on Tuesday. Monero and Zcash were among the weakest performers in the top 100 by market capitalization, both dropping about 8% over 24 hours.
Monero and Zcash both posted sharp losses deeper than the broader privacy coin average of 5.8%. The drawdown is a mix of risk-off sentiment and privacy-specific regulatory pressure, according to Pavel Nikienkov, co-founder of privacy blockchain Zano.
Monero is down almost 20% over the past week, trading around $376. Zcash has dipped more than 26% over the week, with heavier turnover of roughly $399 million in 24-hour volume.
This week’s privacy coin drawdown looks like a mix of broader risk-off positioning and privacy-specific pressure. “When markets get cautious, narratives that are perceived as ‘regulatory risk’ tend to be sold first, and privacy coins are often placed in that bucket regardless of their actual use cases,” Nikienkov explained.
The broader privacy coin selloff comes as privacy-focused assets face structural headwinds tied to regulation and exchange access. Over the past three years, centralized platforms have threatened restrictions or removed privacy coins from listings.
Such a predicament opens broader conversations over whether privacy coins are being priced out as regulatory liabilities. “Privacy isn’t losing relevance, it’s only becoming more necessary, but the market is still treating it like a niche feature instead of core infrastructure,” Zano’s Nikienkov stated.
The industry’s mistake is pushing opt-in privacy models, he opined. “Privacy only works as a network effect: if most users stay transparent, the private set becomes small, weaker, and more identifiable.”
