In 2025, privacy coins performed remarkably well, with on-chain transaction share soaring to 11.4%. What does this number indicate? Once marginalized, privacy assets are quietly rewriting the market landscape. Many industry insiders believe that privacy could become the new storyline in the crypto market in 2026.

But the reality is not so simple. There are still many hurdles facing privacy coins.

First is the mountain of regulation. Projects like Monero have already been delisted from many exchanges. To survive in the future, privacy projects need to find a balance between technology and compliance. Simply hiding information crudely is not enough; they must find ways to protect user privacy while meeting regulatory transparency requirements—that is the real technical challenge.

Second, user experience remains a bottleneck. Key management, computational efficiency—these foundational infrastructures still need upgrades. Before large-scale adoption, these user experience issues must be addressed.

Another issue that cannot be ignored: the privacy track is becoming increasingly crowded. Homogeneous competition is inevitable, and ultimately, only projects that possess advantages in technology, ecosystem, and compliance will survive.

Ultimately, privacy needs are no longer niche or marginalized. As blockchain gradually penetrates traditional finance and industrial sectors, data sovereignty protection will become a genuine necessity. The key in 2026 may lie in who can develop solutions that meet regulatory requirements while truly safeguarding users' core data sovereignty. If privacy protection can be built into the infrastructure layer from the start, rather than added as a patch afterward, this approach might be the right direction.