coindesk.com
$ZEC$395.08, a privacy-focused cryptocurrency, overtook $XMR$349.65, the sector's longtime dominant token, in market capitalization in what may represent a changing of the guard.
$ZEC's market cap overtook $XMR's for the first time on Friday, sitting above its older peer for several hours after climbing almost 50% in seven days. It held that position for most of the weekend, climbing as high as $7.2 million while $XMR stayed around $6.3 billion. The two were recently valued at similar levels around $6.4 billion.
While traders cited technical measures, such as soaring trading volumes, a technical breakout from long-term resistance and November's block-reward halving as immediate catalysts for $ZEC’s rally, fundamental factors may also be at play.
One key difference between zcash, which started up in 2016, is its optional-privacy model. Users are able to choose between transparent and shielded transactions, a facility that monero, introduced in 2014, lacks. That flexibility may be helping $ZEC win support from traders and institutions seeking privacy without the regulatory baggage that has weighed on $XMR, which remains delisted from several major exchanges.
"Unlike monero, which will likely remain unavailable on major Western-regulated exchanges, zcash offers flexibility, with optional privacy that can be activated when needed," Ray Youssef, CEO of the peer-to-peer crypto (P2P) app NoOnes, said in an interview over email.
"This gives institutions room to maintain compliance and reporting, making $ZEC a regulatory-acceptable asset, while $XMR remains toxic from an AML and KYC compliance perspective," he said referring to anti-money laundering and know-your-customer requirements.
There's also Zashi CrossPay, a privacy-preserving cross-chain payment protocol, that has positioned zcash as a potential privacy layer for broader crypto networks such as Bitcoin and Ethereum.
Zcash's recent gains form part of a longer-term boom in its price, which jumped nearly 1,000% in the last three months, CoinDesk data show. Monero, meanwhile, rose just 11.5%.
Another factor behind $ZEC's outperformance could be the influence of crypto analyst and commentator Arthur Hayes, who has predicted zcash reaching $10,000 per coin in numerous posts on X over the last week. Hayes is a noted figure in the crypto industry for his bold and sometimes contrarian views.