KEY POINTS
- $XMR has been rallying by 26% in the past seven days after many months below $200
- The token gained popularity due to its feature of default anonymity for users
- Privacy coins were once popular but concerns around its use in black market affected their prices
Monero (XMR) has gradually been climbing over the past few days, taking the attention of cryptocurrency users who have been largely focused on Bitcoin and other top altcoins such as XRP.
On Wednesday, the token climbed above $205 twice amid a week-long increase of 26%. It hasn’t been as fast-surging as XRP, but it stirred the curiosity of crypto users who may have forgotten “privacy coins” in recent months.
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What is $XRM and What are Privacy Coins?
Monero is a privacy coin – a type of crypto asset that can’t be traced and can be used securely by people who would rather keep their financial transactions out of the public eye.
Unlike with Bitcoin where the blockchain is transparent, XMR users are “anonymous by default.” The Monero network uses stealth technology to ensure that senders, receivers, and the amounts of transactions are hidden.
The privacy that coins like XMR provide made it popular in the crypto space but it also raised some concerns in some jurisdictions as regulators clamped down on black market activity fueled by privacy coins.
Will Privacy Coins Take the Spotlight Soon?
For some crypto users, XMR has a lot of potential, even as regulatory clarity around the tokens remains a blur. Some believe privacy coins in general, not just Monero, will surge during the altcoin season.
Most of the interest remains around XMR as it is the largest privacy token by market cap. Other notable privacy coins are Zcash (ZEC), DASH, Decred (DCR), and MimbleWimbleCoin (MWC).
For prominent trader UB, XMR may “get silly” in the coming days, noting how the coin’s price has “not been above $183 in over 900 days,” but now, it has broken above the said price and even topped $200.
Another well-known digital asset trader, Bossman, said he is “heavily long” on XMR, expecting that the token will be the next altcoin to skyrocket if it can break out of the $200 range.
XMR is still a few hundred dollars away from its all-time high above $542 back in 2018, unlike some other altcoins that lost much more, Monero is still considered a worthy play by some crypto users.
Meanwhile, some have associated the rise of privacy coins to a recent court ruling that the U.S. Treasury overstepped its authority when it sanctioned crypto mixing tool Tornado Cash. Crypto mixers obscure the path of digital assets to prevent tracking.
It remains to be seen whether XMR and other privacy tokens will be among the top performers in the altcoin season that a growing number of industry experts believe has already kicked off.
