First Mover: Monero Leads Privacy-Coin Rally as Bitcoin Trips on Path to $12K

Bitcoin (BTC) was gaining for a fourth straight day, approaching the $12,000 price threshold the cryptocurrency failed to hold in August when it last rallied past that level.

“The market has started to move again,” the Norwegian cryptocurrency-analysis firm Arcane Research wrote Tuesday in a report.

In traditional markets, U.S. stock futures pointed to a higher open as investors bet U.S. lawmakers could reach agreement on a new stimulus bill.

Market moves

Privacy coins like monero (XMR) and zcash (ZEC ) are suddenly in vogue – despite regulators’ efforts to crack down on them.

These digital tokens, which come with features allowing users to obfuscate their identities and hide the amounts transferred, have surged in value this year. Monero’s price has nearly tripled in 2020, and zcash has doubled. According to the data firm Messari, a group of 21 digital assets with anonymity-enhancing features has gained 142% this year, compared with bitcoin’s 60% gain.

The bullish market tone comes even as U.S. Internal Revenue Service recently hired blockchain analytics firms Chainalysis and Integra FEC to develop transaction tracing tools for monero and other protocols used to obscure identities. And the U.S. Department of Justice earlier this month published an extensive report on its enforcement framework for digital assets, citing the use of anonymity-enhancing cryptocurrencies as a risk to anti-money-laundering programs and efforts to combat terrorism finance.

Some cryptocurrency analysts say the jump in prices for privacy tokens might just be coincidental, a function of speculation on the part of traders keying off price-chart patterns or algorithms. But it might be that traders think privacy tokens will occupy a key spot in fast-developing, international digital-asset markets and payment systems – precisely because so many users don’t want to transact business under the glare of monitoring by governments, banks or exchanges.

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