Recently, the privacy coin sector has been exceptionally hot, with XMR and ZEC experiencing significant gains. However, a closer look reveals that there is quite a bit of speculation involved in this market movement. As the entire crypto industry moves toward regulation, high-risk privacy assets are more likely to be marginalized, and the market prefers transparent and traceable projects. That said, privacy coins are not entirely without value; projects like ZEN have some good ideas. But the complete ban on privacy coins in Dubai indicates that this is not a temporary decision—it's serious. For example, ZEC has chosen to retreat in the face of regulatory pressure because some things are hard to explain—there are too many gray areas, and the anonymous mechanisms are complex, making it difficult to prove innocence.

The reason XMR is currently booming is largely due to the popularity of ZEC and the transfer of users. But this also clearly shows that its risks are not small. XMR currently only supports contract trading, with no spot backing, and its market cap is approaching the hundred-billion level. Even more concerning is that the fees for contracts are almost zero, meaning that whether traders are long or short, participants have no real cost pressure. From the project side, as long as the system doesn’t collapse, maintaining traffic is enough—since there’s no real spot demand constraint, the contract side only needs to control the pace, avoid constantly pumping the price, and leave enough opportunities for retail investors to enter. Naturally, this leads to continuous siphoning of funds. In this slow growth, everyone is gradually ignoring the real risks and transparency issues in the market.