Deep Tide TechFlow message: On September 22, 21Shares AG researcher Matt Mena released a report stating that privacy protection is becoming a core issue in the large-scale institutionalization of crypto assets. The report shows that the market capitalization of the privacy coin sector has nearly quintupled over the past year, rising from $6.2 billion to about $30 billion, with a compound annual growth rate of 111%. It is currently the only crypto sector whose trading price is above the October 2025 peak—up 216% versus the peak—while the overall crypto market excluding stablecoins and privacy coins remains about 32% below the peak. Among them, the largest privacy network, Zcash (ZEC), has a market cap of roughly $20 billion, up about 400% from its 2021 peak of $4 billion.

The report notes that there is empirical evidence of demand for institutions to adopt privacy solutions: Canton Network has attracted more than 600 financial institutions, including Goldman Sachs, JPMorgan Chase, and DTCC (custody of over $1 trillion in U.S. securities). Each month, it processes more than $800 billion in tokenized assets. Meanwhile, between 2022 and 2025, on-chain MEV (maximum extractable value) has cumulatively siphoned off about $1.7 billion, making it difficult for institutions to safely conduct large on-chain settlements without privacy safeguards.

On the compliance front, Chainalysis data shows that illegal activity accounts for less than 1% of total cryptocurrency transaction volume, and about 84% of that involves stablecoins rather than privacy coins. By comparison, the UN Office on Drugs and Crime estimates that traditional financial systems launder an estimated $800 billion to $2 trillion per year. The U.S. SEC has closed its multi-year review of the Zcash Foundation without taking enforcement action, and the first U.S.-listed ZEC spot ETP was subsequently approved for listing.

The report argues that if the privacy track can capture 5% of the offshore wealth market (approximately $1.1 to $1.6 trillion in size), the segment’s market value would reach $55 billion to $80 billion—representing 18 to 27 times growth compared with the current roughly $3 billion. Both Ethereum and Solana have already incorporated privacy features into their roadmaps, and a16z has also listed privacy as one of the most important competitive advantages for 2026.