The digital asset sector faces losses, strained market infrastructure, and investor disappointment in turbulent fourth quarter. However, privacy-focused cryptocurrencies like Zcash outperformed, with its price soaring from $50 to near $700. Zcash saw increased use of shielded addresses, concealing transaction details. Monero and Dash also saw gains.

Grayscale attributes surge in privacy-focused cryptocurrencies to “defensive positioning within crypto markets.” Privacy tokens are classified under the Currencies subsector, used as mediums of exchange or stores of value. Despite a 15% decline, the subsector outperformed other segments like financials and smart contract platforms. Bitcoin’s relationship with equity markets weakened in Q4.

Correlations between Bitcoin and equity markets strained in Q4 amid structural stress in the crypto sector. An Oct. 10 liquidation event caused controlled deleveraging, affecting the market. Privacy tokens surged as investors sought defensive positioning. Monero, Dash, and Zcash saw relative gains, highlighting renewed interest in confidentiality-focused blockchains.

Read more at Cointelegraph: Privacy Coins Outperform as Crypto Investors Turn Defensive