A new investment narrative is building momentum around crypto privacy, fueled by a global regulatory crackdown that analysts argue is effectively a “criminalization of privacy.” This pressure is ironically legitimizing privacy-centric assets.
The market is already reacting: Zcash (ZEC), the sector leader, has seen a 10x rally, signaling what analyst Miles Deutscher believes will be the most important web3 narrative of the next five years.
According to Deutscher, the rising demand for privacy-centric assets is a direct response to government overreach. He points specifically to the European Union’s new anti-money laundering (AML) rules, which are set to take effect in 2027.
The new EU rules will ban anonymous crypto accounts and privacy coins, require identity verification for transactions over €1,000, and limit cash payments to €10,000.
Deutscher argues that aligning all crypto transactions with the oversight of traditional finance is the key reason this privacy sector will thrive, as users seek an alternative.
This regulatory push coincides with a maturation of privacy-enhancing technology, led by Zero-Knowledge Proofs (ZKPs). The reliability of ZKPs has gained traction across the industry, with leaders like Vitalik Buterin advocating for on-chain privacy.
The technology is also gaining institutional recognition. Earlier this week, venture capital firm a16z urged the U.S. Treasury to incorporate Zero-Knowledge Proofs into its AML policy as it implements the new GENIUS Act.
The market is not waiting for 2027 to react. Deutscher notes that institutional investors are already signaling their support, reflected in the surging demand for privacy assets.
The ZEC shielded pool supply has grown to nearly 4 million coins, and Google searches for privacy-related crypto projects are climbing. This trend is super-charged by ZEC’s recent 10x rally, which has captured market attention and increased demand for other privacy-focused tokens.
The Humanity protocol (H) uses a similar approach to Worldcoin (WLD), but pays more attention to privacy. Through protecting users’ identity, the H token has grown exponentially in the past few days.
According to the latest crypto oracles at press time, H had a market cap of about $305 million and a 24-hour average trading volume of about $30 million. The notable growth of H has partially been influenced by its recent
Backed by Goldman Sachs, Canton (CC) has grown to a mid-cap project with a fully diluted valuation of about $4 billion at press time. Through helping major blockchains such as Ethereum (ETH) and Solana (SOL) achieve privacy, Deutscher believes that CC will be a major crypto player in the coming years.
The Railgun (RAIL) is a small-cap altcoin focused on democratizing crypto privacy. In 2025, RAIL price gained 10x to reach an all-time high of about $5.66 on November 6, 2025.
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