If Zcash (ZEC) was among the winners of 2025, 2026 could ultimately be the year of Monero (XMR).
Several factors indeed show that XMR has the potential to become one of the best crypto assets in 2026. However, these same characteristics also make it a fairly sensitive asset, as they can expose users and investors to legal risks.
Stable demand for on-chain transactions over several years
The first catalyst comes from the on-chain demand for transactions in XMR. Indeed, this trend clearly emerges from blockchain data. Bitinfocharts data track the number of daily transactions of the three main privacy coins over nearly three years.
Transaction volumes for ZEC and DASH surged in Q4 2025, only to plummet sharply afterward. In contrast, XMR transaction counts have remained stable for many consecutive years.
Stable demand provides a solid foundation for long-term growth and stability. This fundamentally differs from growth driven by short-term hype and speculation. Furthermore, recent reports suggest that over long periods, XMR shows higher transaction volume and user activity than ZEC and DASH.
Monero can avoid the risks associated with Zcash (ZEC)
The second catalyst comes from signs of strong and consistent developer activity around Monero.
Unlike many projects, Monero (XMR) is not managed by a formal entity. Instead, a decentralized community of researchers, developers, and volunteers maintains and develops the protocol.
This structure helps XMR avoid risks similar to those faced by ZEC's development team. Many investors believe this factor could support new price highs. This point is particularly important as investors increasingly move away from assets with centralized governance risks.
"XMR remains the most interesting of the major altcoins to watch in the near future, [with] a ten-year history of real-world use as a private currency, and not just as a speculative asset. XMR also avoids the corporate threat that ZEC faces. A breakout above all-time highs would favor a strong rally," said investor The Crypto Dog in a post.
Artemis data also shows that the weekly number of commits by Monero's core developers reached 400 at the end of last December, setting an absolute record.
This signal shows the strong involvement of the development community and could strengthen confidence among new investors.
Privacy at the heart of the crypto tax reporting era
The third catalyst comes from rising demand for privacy, as new crypto tax reporting frameworks will come into effect in 2026.
A BeInCrypto report indeed indicates that the new European DAC8 directive on digital asset tax transparency took effect on January 1, 2026. This rule requires exchanges, brokers, and custodians to report detailed information about users and transactions to national tax authorities.
"Monero (XMR) is a true nightmare for tax authorities. It was designed from the start to resist tracking through ring signatures, confidential transactions, and stealth addresses," said investor CR1337 in a post.
Using XMR to hide transactions could be considered illegal under many regulatory frameworks. Nevertheless, this clearly demonstrates an existing demand in the market.
This dynamic reflects two sides of the same coin: as regulatory pressure intensifies, demand for privacy tools also increases. A market for Monero continues to exist as long as the asset delivers real utility aligned with users' needs.
However, acting against authority and government interests also exposes XMR users to legal risks.
