The cryptocurrency market has experienced dramatic shifts across multiple sectors over the past week. Privacy Tokens and Layer-2 protocols were the clear winners this week. This week’s performance indicates a growing trend of investors positioning themselves about regulatory changes as well as technological advancements as we approach the final weeks of 2025.
Zcash Dominates with Historic Weekly Surge
Zcash (ZEC), a privacy-focused cryptocurrency, has grown significantly this week. During the week, Zcash gained almost 30.64% to $453.33, leading all cryptocurrencies. Volume traded exceeded $883 million. Zcash has regained its momentum due to numerous factors that have resurrected institutional investor interest in privacy-based blockchain technologies.
The occurrence of the rally is an indication of the fact that privacy assets are of interest to institutions after changes in politics. Market observers attribute the shift to expectations of more lenient regulations under the new administration. Recent additions to the Presidential Council of Advisors for Digital Assets have boosted privacy-focused cryptocurrencies’ regulatory prospects.
The Zcash Foundation reports that zero knowledge proofs execute 15% of ZEC transactions every day, with over 4.5 million tokens in the shielded pool. Shielded Labs introduced a dynamic charge concept to manage price volatility-related transaction costs. A Zcash ETF filed by Grayscale on NYSE Arca is a turning point, signifying institutional interest in privacy-themed assets through regulated vehicles.
MemeCore and Layer-2 Tokens Show Strong Performance
MemeCore (M) rose 23.88% to $1.66 on $16.5 million in trading this week. It recently launched an EVM-compatible mainnet, opening the door for meme-driven rewards and cultural engagement. MemeCore has also secured funding from well-known venture firms, including IBC Group, Waterdrip Capital, and AC Capital, to support its meme-focused infrastructure.
Meanwhile, Merlin Chain (MERL) climbed 18.02% over the week, trading at $0.4384 with $59.7 million in volume. Bitcoin’s native Layer-2 protocol deployed in early 2024 improves DeFi scalability. Merlin accelerates Bitcoin network transactions through the power of ZK Rollup networks and decentralized oracles.
The week saw Canton (CC) rise 17.26% to $0.07072 on $38 million in volume. Broadridge, Cumberland, Digital Asset, and Euroclear supported the Global Synchronizer MainNet launch in July 2024. The Linux Foundation runs the Global Synchronizer Foundation, bolstering the institutional blockchain.
Mantle (MNT) surged by 16.64% over the week, reaching $1.25 with a trading volume of $174.5 million. The Ethereum Layer-2 ecosystem is expanding rapidly and draws the interest of developers and investors as well. Based on technical signals, Mantle could see further upside after breaking through key resistance levels.
Regulatory Evolution and Market Dynamics
The crypto market shows that legal frameworks are shifting to allow privacy technology and Layer-2 scalability solutions. The recent political developments in the U.S. indicate possible future adjustments to limitations placed on privacy-based cryptocurrencies; however, the overall current regulatory framework presents ongoing challenges in terms of compliance requirements that are impacting investors’ decisions, as well as valuation of projects.
Different jurisdictions across the world have varied laws that will affect privacy currencies. In the past, exchanges have delisted currencies due to compliance issues concerning their privacy features; however, the reaction of the market indicates that many traders/market participants believe that regulations regarding privacy currencies will shift positively. Compared with privacy coins, layer-2 protocols have clearer regulatory guidance. These Layer-2 protocols address legitimate technical issues, and they do not introduce privacy features that are controversial.
Conclusion
Strong weekly movements in the price of privacy coins and Layer-2 protocols, especially with Zcash gaining 30.64%, indicate how well these sectors perform during tough times for the crypto market due to optimism about regulations and innovations. As the narrative for privacy becomes more popular and Layer-2 technology is adopted at a quicker pace, we expect privacy coins and Layer 2s to continue outperforming major cryptocurrencies until at least late 2025.