While leading privacy coins such as Monero (XMR), Zcash (ZEC), and Dash (DASH) have already reached multi-billion-dollar market capitalizations and posted strong gains, capital flows appear to be shifting toward lower-cap privacy coins.
January recorded notable accumulation activity in several mid- to low-cap altcoins. This may reflect whales’ positioning ahead of expectations that the privacy coin narrative will continue to attract capital in 2026.
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1. Horizen (ZEN)
Horizen is a privacy layer protocol built on Base, Ethereum’s Layer 2 network.
Horizen aims to deliver privacy while remaining compliant with regulations. The protocol enables institutions, enterprises, and users to conduct transactions and computations on-chain in a confidential, verifiable, and legally compliant manner.
ZEN is currently a mid-cap altcoin with a market capitalization of over $226 million. In January, ZEN rose more than 50%. Despite the rebound, it remains down by more than 90% from its 2021 peak.
ZEN is also part of Grayscale’s investment products through the Grayscale Horizen Trust. CoinGlass data shows that Grayscale has increased its ZEN holdings since late 2024. The firm now holds more than 948,000 ZEN, equivalent to over 5% of the circulating supply.
Grayscale’s continued accumulation, despite ZEN falling more than 70% since the end of 2024, signals long-term conviction from Grayscale investors. Previously, Grayscale’s promotion was one of the key factors driving ZEC’s rally last year.
Some investors believe that following the rallies in Monero (XMR) and Dash (DASH), Horizen (ZEN) could be the next candidate.
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“We’ve taken a big position in Horizen (ZEN). This looks primed for an aggressive pump following big gains from XMR and DASH,” The Whale Pod said.
2. Railgun (RAIL)
RAILGUN is an on-chain privacy and security system built directly on blockchains such as Ethereum, BSC, Polygon, and Arbitrum.
Railgun uses zero-knowledge (ZK) cryptography to allow users to transact and interact with DeFi anonymously.
RAIL is the governance token of RAILGUN and currently has a market capitalization of over $165 million. Nansen data shows that over the past 30 days, RAIL balances on exchanges declined by more than 5%. At the same time, balances held by whale wallets increased by over 24%.
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A report from Messari, an on-chain analytics platform, stated that in 2025, Railgun processed $2 billion in shielded and unshielded volume. This activity generated $5 million in revenue.
Railgun Quant, a researcher at Messari, noted that at prices below $3, RAIL may be undervalued. The token’s price could potentially double from current levels.
“Even at $3.10, $RAIL is trading at a discount of more than 50% to my RAILGUN valuation model’s base case of $6.26,” Railgun Quant said.
3. Decred (DCR)
Decred (DCR) is a Layer 1 blockchain that uses a hybrid Proof-of-Work (PoW) and Proof-of-Stake (PoS) consensus mechanism. The network also supports privacy-preserving transactions.
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DCR currently has a market capitalization of over $479 million. Accumulation trends are evident in the rising share of supply staked since Q4 2025.
Decred data shows that more than 10 million DCR are now staked. This represents over 62% of the total supply and marks the highest ratio since March 2025.
Amid growing interest in privacy coins, Decred has entered the top 5 privacy coins by market capitalization on CoinGecko. Analysts expect the price to move beyond the current $27.6 level and potentially reach $60.
“DCR just broke out of accumulation! Inverse head & shoulders confirmed. That shifts the market into markup mode!” analyst AltCryptoTalk predicted.
Experts continue to rate the privacy coin narrative highly for 2026. Large-cap privacy coins with multi-billion-dollar valuations may face pressure to profit-take. Low-cap altcoins carry higher liquidity risks. Mid-cap privacy coins may strike a balance between the two and hold potential to join the billion-dollar market cap club.