If Zcash (ZEC) was one of the winners in 2025, 2026 could be the year of Monero (XMR).
Several factors suggest that XMR could become a focal point in 2026. However, the same characteristics also make XMR a delicate asset, exposing users and investors to potential legal risks.
Stable on-chain transaction demand over the long term
The initial catalyst lies in the on-chain transaction demand for XMR. This trend is clearly observable in blockchain data.
Data from Bitinfocharts tracks the daily transaction counts of the three major privacy coins over the past approximately three years.
The trading volume of ZEC and DASH surged sharply from October to December 2025, followed by a steep decline. In contrast, XMR's transaction count has remained stable over the years.
Stable demand forms the foundation for long-term growth and stability—fundamentally different from short-term booms or speculative expansion.
Moreover, recent reports indicate that over the long term, XMR has demonstrated stronger trading volume and user activity compared to ZEC and DASH.
Monero, avoiding risks similar to Zcash
The second catalyst is the strong and sustained developer activity surrounding Monero.
Unlike many projects, Monero (XMR) does not have a formal corporate organization. The decentralized community, along with researchers, developers, and volunteers, is responsible for maintaining and developing the protocol.
This structure helps avoid situations similar to those faced by the ZEC development team. Many investors are now placing hope on the possibility of a new all-time high due to this factor. Particularly important as more investors grow wary of centralization governance risks.
"XMR is the most promising among the major altcoins I'm watching in the near future. It has over a decade of proven track record as a practical private currency, not just a speculative bubble. It lacks the corporate influence seen in ZEC. If it surpasses its all-time high, a significant rise is expected," said investor The Crypto Dog.
According to Artemis data, the weekly commit count by Monero core developers reached 400 at the end of last December, setting a new all-time high.
This metric reflects strong commitment from the development community and could potentially build trust among new investors.
Growing emphasis on privacy in the era of cryptocurrency tax reporting
The third catalyst lies in the rising demand for privacy, emerging as a new cryptocurrency tax reporting framework is implemented in 2026.
According to BeInCrypto reporting, the EU's new Digital Asset Tax Transparency Directive "DAC8" came into effect on January 1, 2026. This rule obligates exchanges, brokers, and custodians to report detailed user and transaction data to national tax authorities.
"Monero (XMR) is the worst nightmare for tax authorities. Its design is difficult to track due to ring signatures, confidential transactions, and stealth addresses," said investor CR1337.
The anonymization of transactions using XMR may be deemed illegal under many legal frameworks. Nevertheless, this reality reflects a certain level of market demand.
This situation is like the two sides of a coin. As regulations tighten, demand for privacy tools increases. As long as Monero meets users' practical needs, the market will continue to survive.
However, if XMR users engage in activities that contradict administrative authorities or national interests, they may face legal risks.
