Zcash and Monero Surged in August on Two Major Crypto Upgrades

Privacy-focused cryptos widely outperformed the market in August. Zcash (ZEC) climbed 82%, driven by the launch of Grayscale’s spot ZCSH ETF on NYSE Arca. Monero (XMR), on the other hand, rose 40%, thanks to the arrival of native swaps on THORChain v3.20. And the momentum does not stop there: several more discreet privacy coins are also benefiting, even though regulatory pressure remains strong. 

Zcash, Grayscale’s accelerator boost

ZEC’s surge peaked during the last week of August, but the movement had started well before the ETF listing. The token’s return to its 2018 levels had laid the foundations. 

Then, on August 25, Grayscale finalized the conversion: ZCSH thus becomes the very first listed product to offer direct exposure to ZEC. The fund is backed by about 304 million dollars worth of ZEC held at Coinbase Custody, for an annual fee of 2.5%.

Grayscale presents ZCSH as a “satellite” position. The fund justifies the conversion by the network’s maturity and its zero-knowledge proofs (cryptographic proofs that validate a transaction without revealing amounts or addresses). 

Buying a share of ZCSH rather than holding ZEC offers the benefits of the creation and redemption mechanism typical of ETFs, which reduces the gaps with the fund’s net asset value, whereas the trust was still trading at a 17% discount at the end of June. The effective launch of ZCSH on NYSE Arca remains a world first for spot exposure to a privacy coin.

Monero and THORChain, the native swaps bet

Monero followed a different trajectory. XMR started the month more calmly before accelerating towards the end of August. In the last week, the crypto gained nearly 20%, bringing its monthly gain to around 40% and its market cap to nearly 10 billion dollars.

This time, it was not an ETF that served as catalyst. The main new element concerns THORChain, which integrated native XMR swaps in its version 3.20. This development allows users to swap Monero against other assets like bitcoin or ether directly via the protocol’s cross-chain infrastructure.

For Monero, this integration comes in a particular context. Several exchanges have already removed XMR from their offerings, notably due to compliance difficulties linked to the confidential nature of transactions.

Decentralized liquidity solutions therefore take on additional importance. With native swaps, users can move their XMR without necessarily going through a centralized platform or a tokenized version of the asset.

The rollout remains gradual and liquidity still has to prove itself. The XMR surge observed in August therefore does not guarantee that this momentum will continue at the same pace.

Liquidity vs regulation, the sector’s double challenge

Between institutional access for Zcash and new decentralized gateways for Monero, the market shows renewed interest in financial tools preserving anonymity. 

However, the regulatory environment continues to toughen: about ten jurisdictions already ban trading of privacy coins on regulated exchanges, and the implementation in 2026 of the OECD’s CARF (Crypto-Asset Reporting Framework) will strengthen tax transparency obligations.

For this summer rally to be sustainable, three factors will be decisive: actual flows to the ZCSH ETF, liquidity depth on THORChain, and the projects’ ability to reconcile privacy and compliance. As Zcash’s progress before the Ironwood upgrade already showed, privacy is becoming a promising investment theme again; it remains to be seen if volumes will follow in the long term.