Investors are looking for countercyclical value in privacy coins
– By Carter Feldman, CEO and Founder, Psy Protocol
The continued downward pressure on Bitcoin’s price acts not only as a system-wide depression, but also as a catalyst for efficiency, forcing both miners and investors to seek value in particular plays. The bearish market makes this a prime moment for ZK proof-of-work privacy coins, whose security and logarithmic scalability matter now more than ever to miners and privately agented Internet transactions.
When the price of Bitcoin stabilizes, miners’ margins decrease. This economic reality forces miners to become smarter as capital allocators, shifting hash power toward more profitable, specialized chains. This is a well-intentioned step towards a protocol that not only rewards raw energy expenditure, but also provides the utility that the market wants.
This is where privacy coins enter the conversation. While the broader market consolidated, privacy coins surged led by Zcash Encrypted electronic cash used for private, everyday payments. This far outpaced general market performance, with the price rising by 950% from September lows. This resurgence is a sign that both retail and institutional actors recognize privacy as a missing piece in the maturing crypto ecosystem.
Adoption metrics confirm this. Zcash’s custodial pool (i.e., tokens held on private addresses) recently reached its all-time high of over 4.5 million tokens, indicating growing user demand for true financial autonomy. The market is not just speculating; It is functionally demanding a system that provides accountability without sacrificing privacy.
The technology underpinning this privacy, known as zero-knowledge (ZK) proofs, has real long-term institutional attraction, reaching far beyond the crypto world. ZK is basically a computational tool that allows a party to prove a statement is true without revealing the underlying data.
This capability is increasingly being used in real-world applications where data security is paramount:
- Decentralized Identity: Proving that you are over 18 without revealing your date of birth or name is important for regulatory compliance (GDPR, etc.).
- Supply Chain: Verifying the ethical sourcing or origin of a product without disclosing sensitive supplier contracts or business relationships.
- Secure Voting: Allowing participants to prove eligibility to vote without revealing their identity or ballot choices.
In this context, ZK-native protocols are simply adapting this universal technology to the toughest, highest-stakes computational problem: Internet-scale financial transactions. By performing transaction verification client-side, ZK can scale while maintaining privacy which is becoming the global standard for data security across all industries. It is because of this dual utility that ZK-Native assets are a smart long-term investment; They are built on a technology that is becoming not just optional, but increasingly mandatory, for the global digital infrastructure.
While the market was worried about Bitcoin’s price fluctuations, smart investors recognized that privacy coins met real market demand.
week’s headlines
, by Francisco Rodriguez
This week we’re looking at the world’s largest corporate holders of Bitcoin, the strategy, and bigger risk risks for the decentralized finance ecosystem if regulatory hurdles increase.
vibe check
Make the journey easier, Part II: ETH’s stormy year has not been for the faint of heart.
– By Andy Behr, CFA, Head of Product and Research, CoinDesk Indices
A few weeks ago, we showed how a trend overlay on Bitcoin helped save 2025 returns. Our Bitcoin Trend Indicator (BTI) indicated a “significant downtrend” coming in mid-October, allowing strategies to step aside and preserve capital. For advisors and institutions building long-term crypto allocations, we noted that trend-informed strategies can help “smooth the ride” and keep people in the game.
In last week’s Crypto Long & Short, we reiterated the idea that there can be no broader digital asset class rally without ETH participating in – if not leading. Like it or not, Ethereum is the standard bearer for blockchain adoption stories. It is not an “altcoin” in the eyes of many people. When ETH rises, it signals that something big is about to happen: stablecoins, DeFi, and tokenization are gaining share in the global consciousness. We noted that the Fusaaka upgrade is an embodiment of the kind of progress, focus and yes – messaging that will drive even greater mindshare.
Still, ETH has been quite a handful in 2025, making conviction—and size—a challenge.
matter of ethereal trend
This brings us to a natural question: how does our trend strategy work on ETH? We launched the Ether Trend Indicator (ETI) with BTI in March 2023, using the same quartet of moving average crossover signals. We tested the signs at both properties, liked what we saw and haven’t had to replace them since.
ETH price is color-coded by the Ether Trend indicator (green is uptrend, yellow is neutral, red is downtrend)
Source: CoinDesk Index
If you think about why time series momentum should work – new information drives different areas of the market over time – then ETH seems like a good candidate. Hedge funds and crypto-native derivatives traders are more likely to start a trend. ETFs are more likely to follow flows.
ETH has had three major phases in 2025: the Q1 breakdown, the Q2-Q3 powerhouse rally, and the heartbreaking Q4 decline. We applied a systematic trend strategy (live from October 2023) to ETH to ETH and the results are shocking.
ETH trend strategy (live from October 2023) helped smooth the ride
Source: CoinDesk Index. “ETIS1” strategy. Methodology here. Hypothetical outcome ignoring transaction costs. Past performance is no guarantee of future results.
ETI shows ETH in a downtrend for 5 days and a significant downtrend for the last 29 days. For a market stunned by call bottoms, perhaps it would be better to follow the signals and wait for the trend to reverse.
chart of the week
ETH DAT flow vs ETH price
In this week’s COTW we look at Ethereum digital asset treasury (DAT) flows and ETH price, revealing a clear correlation: the trend of DAT flows appears to be a main price driver. Before October 2025, increasing DAT flows strongly coincided with the ETH price rally. Since ETH’s price peaked around October 2025, both flows and price have been in a downward trend. Given that these DATs hold approximately 3.5% of the circulating ETH supply, the current lack of upward momentum in these flows suggests that a renewed and pronounced uptrend in DAT accumulation is a prerequisite for the next major upward price movement.
