• Wed. Jun 12th, 2024

Privacy Coins’ Economy Demise

There was a time, approximately 12 months ago, when the crypto economy was bustling, however, crypto winter took away all.

It wasn’t just Bitcoin or Ethereum whose values by more than 80%. In fact, it was also the privacy coins’ economy that deteriorated alarmingly.

If privacy coins’ economy decline is measured in figures against USD then the economy has simply shrunk by approximately 55%. It was roughly $12 Billion a year ago but now is less than half of it i.e. $5.22 Billion.

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Lesser Growth As Compared To DeFI and NFT Sectors

It is true though investors do not talk much about privacy coins these days. Instead, attention has been drawn to other digital sectors such as the markets of Non-Fungible Tokens (NFTs) and Decentralized Finance (DeFi).

It wouldn’t be wrong to suggest that DeFi and NFTs have outshone the conversations on the subject of ‘privacy coins’. However, there was a time when privacy coins enjoyed the hype and were the talk of the crypto town.

The interest in privacy coins has been greatly reduced over a period of past 12 months. Otherwise, their economy was moving up at a 120-degree angle.

For instance, in January 2022, crypto coins’ global economy had reached a point of $11.7 Billion i.e. nearly $12 Billion.

However, since crypto winter came, the economy had been declining and, as of today, is moving with the half-reduced economy of $5.22 Billion.

Pioneers of Privacy Coin Economy

Like Bitcoin and Ethereum in the crypto economy, Monero and Zcash are regarded as the pioneers of the privacy coins’ economy.

Prior to the crypto winter season, Moneri (XMR) was moving forward with a total market cap exceeding $3.66 Billion. This meant that XMR’s market cap alone was representing more than 30% of the global privacy coins’ economy.

Most importantly, the lead privacy coin was switching hands at a single unit price of almost $203. However, conditions changed and they changed quickly.

In less than a year, i.e. since 19th January 2022 till to date, XMR’s total market cap has reduced to $2.58 Billion. On the other hand, the coin is swapping hands at $142.35 according to the present market value.

It though however represents approximately 50% of the global economy of privacy coins.

Zcash, which was and continues to be the second-largest privacy coin by value and market cap, also faced similar circumstances.

As of January 2022, Zcash’s economy was hovering above $1.53 and now it has reduced to $517 Million only. Similarly, the coin’s single unit value in January 2022 was more than $200 which has reduced to $142.35 today.

Other Contributors of Privacy Coin Economy

XMR’s and Zcash’s market caps would show that collectively they represent over $3 Billion of the global privacy coin economy of $5.22 Billion.

However, there are various other privacy coins that make up the privacy coin economy as it stands today.

They include among the top, apart from XMR and Zcash, Dash, Decred, Beldex, Secret, Horizen, etc.

Potential Fear

There are rumors making round in the privacy coin economy that highly confidential data of the EU has been leaked. This leak suggests that the EU has made a plan whose implementation would altogether ban the usage of privacy coins.

The leak also suggests that the privacy coins which shall be banned initially would include XMR, Zcash, and Dash.

Regulators from around the world are very concerned about the privacy tokens and the EU is among the highly concerned authorities.

Therefore, it is only a matter of time before these tokens will be banned in the European region for good.

If that happens, the crypto market will end up facing yet another major incident in the year 2023. It could lead to several losses in the investors’ market so the regulators have to remain very cautious of that.

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