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Recently, it has been observed that Monero (XMR) and Zcash (ZEC) exhibit a certain correlation in their price movements. Interestingly, after the original core team of ZEC left and shifted focus to XMR development, XMR's market capitalization surged significantly, while ZEC's performance remained relatively weak. What does this reflect?
Why has Monero become the "leader" in the privacy coin field? Several key factors cannot be ignored:
**The Explosion of Privacy Demand**. In an increasingly strict regulatory environment, the demand for anonymous transactions continues to rise. As a representative of privacy coins, XMR's technical solutions are widely recognized, and its application scenarios have expanded from academic discussions to actual transactions.
**Bull Market Profit Effect**. When Bitcoin rises, it often drives capital inflows into the entire market. As a high-profile coin, XMR naturally benefits, with capital pouring in and pushing up its price.
**Technological Innovation as a Moat**. The ASIC-resistant proof-of-work mechanism allows ordinary miners to participate, and the reliability of privacy technologies like ring signatures has gained industry recognition. These factors strengthen community consensus.
**Supply-Side Tightening**. XMR adopts a deflationary mechanism, with supply decreasing as mining progresses, while market demand remains steady or even increases. This supply-demand imbalance pushes prices higher.
Of course, predictions like "4-digit" prices should be approached with caution; the market is always full of uncertainties. But from fundamental and market sentiment perspectives, attention to the privacy coin sector is indeed increasing.