Grayscale Highlights Six Privacy Coins, Including Zcash, to Watch

Summary:
Grayscale's recent report underscores Zcash as a leading player in the privacy coin category. Recent developments indicate a strong performance in the privacy segment, with Zcash experiencing substantial activity in its Shield Pool. The report also points to a growing institutional focus on privacy assets as concerns over data security continue to rise.

Key Takeaways

Zcash is currently a standout in the privacy coin market, evidenced by record levels of activity in the Shield Pool.
Over 5 million ZEC tokens are locked in the Shield Pool, representing about 30% of its circulating supply.
Despite the price downturn last month, Zcash rebounded by over 70% in December, boosting investor confidence.
Institutional interest in privacy tokens is growing, particularly due to increasing data breach incidents across various sectors.
Grayscale projects ongoing growth for the privacy coin market through 2026, driven by advancements in decentralized finance and Web3 integration.

Grayscale Points to Zcash Among Six Privacy Coins to Watch

Zcash Leads the Privacy Coin Sector

Zcash has not only excelled within the privacy sector but has also topped the rankings in Grayscale's overall Top 20 tracked assets. The last quarter was identified as a period of consolidation following notable growth, yet privacy coins have managed to outperform many other asset categories during this time.

Record Levels for Zcash Shield Pool Activity

Recent data from zkp.baby reveals that the ZEC locked in the Shield Pool has exceeded 5 million tokens, which is roughly 30% of the total circulating supply. This achievement represents a significant milestone for Zcash’s privacy features.

The Shield Pool is integral to Zcash's framework. It allows users to convert ZEC from transparent addresses to shielded ones, enhancing the privacy of transactions.

Throughout November, the level of ZEC in Shield Pools remained stable at around 4.8 million tokens, even as the price of ZEC dropped nearly 60% at one point. This indicates that holders chose to maintain their positions amidst market turbulence rather than sell during declines.

As December arrived, Zcash's price rebounded by over 70%, coinciding with new highs in the Shield Pool. These developments seem to have bolstered investor confidence in Zcash's privacy-focused value.

Prominent cryptocurrency investor and former BitMEX CEO Arthur Hayes shared an optimistic view on ZEC, stating, “The tears of the bears shall be my sustenance. ZEC's first stop is $1,000.”

Growing Institutional Interest in Privacy Assets

Grayscale’s Q4 report highlighted a notable shift in institutional interest towards assets that provide enhanced privacy features. This trend is fueled by the ongoing emergence of data breach scandals across technology platforms and traditional financial systems.

The report indicated that privacy-related tokens were prevalent among the Top 20 performers in Q4 2025, with the six highlighted coins posting returns that outpaced much of the broader cryptocurrency market during the consolidation phase.

Looking ahead, Grayscale anticipates consistent growth for the privacy coin segment throughout 2026. This growth is expected to be spurred by the integration of privacy features in decentralized finance protocols and Web3 applications, as developers strive to incorporate these capabilities into mainstream blockchain technologies.