Zcash大量 funds are fleeing to XMR. What exactly is happening with privacy coins?

Zcash core team collectively resigns, CEO Swihart claims they were “constructively dismissed.” Zcash drops 16.7% to $398, exchange balances increase by 7%, CMF turns negative confirming outflows. XMR rebounds 5% to $456, CMF surges, only 13.5% below its all-time high of $518. Funds are shifting from ZEC to XMR.

Chain Reaction of the ECC Team’s Collective Resignation Collapse

(Source: Nansen)

Due to internal turmoil within the core development team, the price of Zcash has come under significant pressure. As market confidence wanes, this privacy-focused cryptocurrency’s price plummets. Electric Coin Company (ECC) CEO Josh Swihart confirms that all ECC team members resigned collectively after experiencing what he calls a “constructive dismissal.” This term refers to a situation where working conditions change significantly, leaving employees with no choice but to resign.

Swihart states that the decision made by the board overseeing ECC altered employment terms, weakening the team’s ability to operate independently. “Yesterday, all ECC team members left the company after being ‘constructively dismissed’ by ZCAM. We are creating a new company, but we remain the same team with the same mission: to build unstoppable private money. Importantly, the Zcash protocol remains unaffected.”

While this statement attempts to reassure the market, the guarantee that “the protocol is unaffected” has limited credibility within the crypto community. The development team is the soul of a blockchain project; a collective departure usually signals a project entering a decline phase. Even if the protocol code continues to run, subsequent upgrades, bug fixes, and ecosystem development will stall. Investors are highly sensitive to such risks and tend to vote with their feet.

ZEC holders reacted swiftly to the announcement. On-chain data shows a surge in selling activity within hours. Nansen reports that exchange inflows increased significantly, with ZEC balances on exchanges rising by about 7% within 24 hours. Rising exchange balances typically indicate that investors are preparing to sell, highlighting a sudden shift in Zcash investor sentiment. As participants reassess risks related to leadership and developmental continuity, confidence rapidly declines.

This rapid sell-off indicates market skepticism rather than patience. When corporate governance is disrupted, short- and medium-term investors tend to reduce holdings first. This reaction exacerbates downward pressure in an already volatile environment. Zcash’s price fell 16.7%, trading near $398, hitting a multi-month low.

Four On-Chain Evidence of the Zcash Sell-Off

Exchange Balance Surge: 7% increase in ZEC holdings on exchanges within 24 hours, indicating holders are preparing to sell

CMF Turns Negative: Chaikin Money Flow indicator turns negative, confirming net outflows

Volume Spikes: Significant increase in trading volume during the sell-off, indicating genuine selling pressure rather than low liquidity decline

Rapid Price Drop: 16.7% decline completed within hours, reflecting panic selling

Multiple Evidence of Funds Moving to XMR

(Left: Zcash price chart, Right: XMR price chart, Source: Trading View)

Funds flow data suggest that capital may be shifting from ZEC to Monero. While not definitive, all indicators point to divergence in the trends of these two privacy coins. Chaikin Money Flow for Zcash has turned negative, indicating net outflows. Meanwhile, Monero’s CMF has surged, reflecting increased inflows. These opposing signals align with the price movements. Zcash’s price dropped 16.7%, nearing $398, while XMR rose about 5% during the same period.

In terms of timing, investors may be reallocating within the privacy sector rather than exiting it entirely. When uncertainty arises around a project, capital often flows into other projects within the same category perceived as more stable. Monero, as a “purist” privacy coin, has a more aggressive protocol design—default privacy for all transactions—compared to Zcash, which requires users to opt-in for privacy. This technical difference makes XMR more favored by privacy maximalists.

Momentum indicators further support an improved outlook for Monero. After the Zcash announcement, Monero’s Money Flow Index (MFI) surged sharply during early trading hours. MFI tracks buying and selling pressure through price and volume. An increasing MFI indicates strong market demand; for Monero, rising MFI suggests buyers are confidently entering the market. This demand may reflect investors’ desire to invest in privacy coins without affecting governance.

Currently, XMR trades near $456, about 13.5% below its all-time high of $518.99. Persistent buying pressure could act as a catalyst. If capital continues to shift from ZEC, Monero (XMR) might gain enough momentum to challenge its previous peak. Only $62 away from a new all-time high, this “close call” is highly attractive.

Power Shift in the Privacy Coin Sector

Simultaneously, market behavior indicates capital may be moving from Zcash to Monero, raising questions about whether XMR will benefit from ZEC’s increasing uncertainty. Such power shifts are common in crypto history; when a leading project in a sector encounters issues, the runner-up often quickly rises to take its place.

Monero’s advantage lies in its relatively stable governance. XMR is maintained by a community of developers rather than a corporate entity controlling development like Zcash. This decentralized governance, though less efficient, avoids risks of project paralysis due to internal corporate conflicts. For investors prioritizing stability, this is a key difference.

From a regulatory perspective, Monero faces greater pressure. Due to its strong privacy features, XMR has been delisted from multiple exchanges. This regulatory pressure limits XMR’s liquidity and accessibility. In contrast, Zcash’s optional privacy features give it more flexibility in compliance. However, the current market seems to value technical purity and governance stability over regulatory friendliness.

Overall, the collective resignation of the Zcash team has triggered capital flows into XMR. Indicators like CMF and MFI confirm funds are moving from ZEC to XMR. Monero is only 13.5% below its all-time high; if the trend continues, it may reach new highs.