Are Privacy Coins Like Monero And ZCash Already Dying?

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31 Jan 2024

"It's harsh but everything will trend to zero against Bitcoin". These kind of statements from Bitcoin maximals can often evoke an unnecessary doubt in the mind of altcoiners. This theory about Bitcoin being the great sole survivor is contradictory in itself. However privacy coins from altcoin arena are nearly proving these prejudices correct. How would you asses the situation for privacy coins if I tell you that nearly 90% of all privacy coins are dead and some are already +99% down from their ATHs?

What are Privacy Coins?

Privacy coins are specifically created to offer a higher level of anonymity compared to other cryptocurrencies like Bitcoin. They achieve this by concealing transaction specifics, including the identities of the parties involved and the amounts transacted.
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The Root Cause of Their Demise?

The very characteristic of heightened privacy has attracted the attention of regulators worldwide. They express concerns that the underlying technologies supporting these assets could potentially be exploited for illicit purposes such as money laundering, financing terrorism, and evading economic sanctions.

How Privacy Coins are Faring Pricewise?

For example, ZEC shot upto $5k in its early days and now it is trading close to $20. Another one is DASH that recorded an ATH of $1500 and now trading between $25 to $30. Let me clarify that such a nosedive in the prices doesn't necessarily mean that they are now extinct. In fact they are still very popular alongwith Monero (XMR), Decred (DCR) and Beldex (BDX). What actually this tells us that they have reached at an alarming level of scrutiny.

Centralized Exchanges on Privacy Coins?

Recently OKX decided that it won't permit any privacy coin on its platform. They didn't declare the reason for delisting but we all know that rulebooks won't allow them.
When many other centralized exchanges are opting to delist privacy coins from their platforms, Binance which currently has the biggest liquidity for these coins have taken a cautious route. Binance has only taken these coins under the 'monitoring tag' (look at the snap below).
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Why Are Privacy Coins Facing Obstructions?

The decision of delisting or monitoring these privacy centered coins may well be attributed to regulatory compliances. All centralized exchanges, if they want to work within any jurisdiction, have to comply with the rule of the land. Everywhere, almost everywhere, the rulebooks are similar as they all want to track down how much one earns so as to tax him. One more thing that governments need to fight terrorism and money laundering and privacy coins don't allow them to peep into the identities of those who are sending and receiving money.
Additionally privacy coins have become a point of contention within the cryptocurrency industry as well. That is specific to the conflict between the industry's core principles of privacy and pseudonymity, and the growing demand for adherence to global regulatory norms.

Jurisdiction that don't Allow Privacy Coins

Last year wounded the privacy coins when it put a ban on them. However Dubai is not the first geography to impose the ban, Japan prohibited them from operating in the country in 2019. So, till now, it's only Japan and Dubai which have banned privacy coins in their jurisdiction.

My Personal Take on the Future of Privacy Coins

I'm not very much optimistic regarding most of the coins under this category. However, I firmly believe that they won't be discreet anytime soon. My reason being quite simple, since there are people who find some use for them, I guess. Delistings will probably reinforce decentralized p2p exchanges. Darknet is a huge fan of the privacy coins, specially Monero, and I don't see other better option for them to trading.
Many of us may call privacy coins as another shitcoins, however, I like Monero (XMR) and for me it's not a shitcoin as it has utility like fast and anonymous payments with low fees. It's better suited for spending, if not for savings or hodling.
In the case of other popular privacy coins, I see ROSE as a blooming prospect. For the HODLERS of ZEC and DASH, a good news is that they are currently trading at the rock bottom and they will only rise from heron. ZEC and DASH aren't down to bottom for the first time and they have a tendency to recover.
I am hodling a few of XMR, ZEC, DASH and ROSE. TBH the total investment is just the 1% of my portfolio. But again I am quite optimistic for better returns from all of these. If you do a little research, you'll find out that they are a little more volatile than other coins and if you wisely trade with them, you can make an impactful profit.
What do you think is the future of privacy coins? Will they survive or become irrelevant in coming years? Can regulators around the globe really stop the use of them?