Key Insights:
- Zcash (ZEC) lost over $2 billion in market cap in one week after ECC announced it would stop protocol development.
- Cardano privacy spin-off Midnight Network (NIGHT) fell by 26%, and this raises some questions about its position among the top 100 coins.
- The privacy-based cryptocurrency market showed divided movements, with Monero (XMR) moving at 8.3% per week.
The second-largest privacy-focused crypto with market capitalization, Zcash (ZEC), fell by 26% over a period of seven days. This drop was preceded by a sudden announcement that no longer will the Electric Coin Company (ECC) take the lead in the creation of the core protocol, which is the organization tasked with the design of the core protocol.
Developer resignation disrupts privacy coin rally
The sudden exodus of developers of ECC has thrown the future of the project into uncertainty. Although the technology was promised not to be affected, the news stopped an emerging boom in privacy-oriented digital assets. The governance shakeup was swiftly met by a reaction in the market, which threw ZEC into a prolonged fall.
ZEC’s market value dropped from $8.3 billion to $6.2 billion, marking a loss of more than $2 billion in just a week. The price of ZEC fell from $432 to $378, positioning the token nearly 50% below its 2025 high.
Cardano’s Midnight also sees sharp losses
Cardano’s privacy-oriented Midnight Network (NIGHT) also experienced a weekly loss of 26%. The token’s value fell from $0.09 to $0.068, bringing its market capitalization closer to $1.1 billion. NIGHT risks falling out of the top 100 digital assets by market cap if the decline continues.
Where ZEC and NIGHT recorded significant losses, Monero (XMR), the most popular privacy cryptocurrency, had an opposite performance. XMR increased by 8.3% during the same time and was trading at 464 and regained its status in the top 25 cryptocurrencies by market capitalization.
A change in attitude clouds the outlook for the privacy coin.
The withdrawal of the developers from ECC has raised issues regarding the management of protocols and the strategic direction of Zcash. The reasons behind these developments are that investor trust in privacy coins might be strongly correlated with the stability of the core team and project clarity.
The decline in ZEC and NIGHT is the opposite of the strength in other popular cryptocurrencies. Bitcoin is trading at about $90,000, and Ethereum has leaped beyond the 3000 mark. The privacy coin segment seems, however, to be moving out of market momentum.
