Recently, many people have been asking me: why have privacy coins suddenly become hot again? Some coins even doubled in a single day—can you still jump in?
My conclusion first: this is not a trend reversal, but rather a temporary fluctuation opportunity driven by events. Getting it right is an opportunity, getting it wrong is getting stuck with the bag.
Why did privacy coins suddenly move?
There is only one core reason: the US government is once again on the brink of a shutdown.
This bomb was actually planted two months ago.
Going back to November 12, 2025, when Trump signed a funding bill, ending the longest government shutdown in history.
But many people overlook a key detail: this agreement is only temporary funding, valid until January 30.
In other words - soon, this agreement will expire.
Second, on January 30, will the U.S. government shut down again?
From the current progress, another shutdown is not a low-probability event.
Although both parties urgently passed a small-scale funding bill this week, it only covers a few key departments, and the truly significant government operating funds are still not agreed upon.
So once the government shuts down, the market's first reaction is often related to privacy assets.
Third, why are privacy coins speculated every time there is a shutdown?
This is not the first time.
In every round of government shutdowns before, privacy coins like ZEC and Dash would be repeatedly speculated.
The reason is simple:
Government shutdown → Regulatory disorder.
Market expectations of a 'regulatory window period.'
Speculative capital loves to pull such 'clearly narrative, small market cap' targets.
Last time, privacy coins were pulled up nearly 20 times during the shutdown period, and then directly crashed when the government reopened.
That round, I treated it as a standard 'event trading' strategy, shorting all the way from the high and profiting from the entire decline.
Fourth, how should we treat privacy coins this time?
My attitude is very clear: do not be superstitious, do not fall in love with battle, do not make it a belief.
ZEC has lost its core narrative due to team dissolution, and is not a good long-term speculation target right now.
So the funds naturally turned to Dash, the kind of 'doubling in a day' you see is essentially speculative capital pulling volatility.
In this market, the most suitable is:
Short-term trading.
Performing volatility.
Or wait for the sentiment to overheat, then look for an opportunity to reverse.
Even if not bullish, as long as it is raised again due to shutdown expectations, it will provide another opportunity to short at high levels.
Fifth, shutdown + CPI seems favorable, but is actually very strange.
After last night's CPI came out, many felt that 'the data is good.' But what I care more about is: how accurate is this data?
Since the last government shutdown, due to incomplete data collection, the Labor Department directly recorded the increase in housing inflation as 0.
That is to say, CPI has been systematically underestimated since then.
The real inflation data given by the New York Fed has risen back to around 3.4%, nearly 0.7% higher than the official CPI.
So you will see a very abnormal phenomenon: the lower the CPI, the less the market dares to bet on rate cuts.
Currently:
The probability of a rate cut in January is already close to 0.
The probability of a rate cut in March is only in single digits.
Sixth, the warning signals from the market have actually appeared.
This recent rebound is not just the excitement of retail investors; some large funds have already started to reduce their holdings.
Someone sold 40,000 ETH within a week, and a major player holding 70,000 BTC, Spoofy, has also sold nearly $200 million in Bitcoin.
What does this signify? They do not see this round of rebound as a restart of a bull market, but as a window for distribution and exit.
I personally pay close attention to the BTC resistance around $98,000. If the price approaches here, I will gradually lay out short positions, at least to bet on a decent pullback.
Seventh, what really makes me vigilant is actually the U.S. stock market.
The correlation between the crypto market and the U.S. stock market is now much higher than many people imagine.
The S&P index has almost always experienced a correction of more than 20% from the bottom to close to doubling.
If the U.S. stock market begins to adjust significantly, the high-volatility Bitcoin will only drop more severely.
And at the end of this month, the Federal Reserve not cutting rates is almost a done deal.
Eighth, the real big opportunities are not now, but in the next round.
What I care more about is actually a longer cycle.
If the Federal Reserve remains inactive in the coming months, waiting for the policy to truly shift and liquidity to be re-released, it will be a long-term cycle lasting several years.
What’s different this time is:
The next round will occur in a low interest rate + expanded balance sheet environment.
The liquidity environment will be much better than now.
Very friendly to altcoins, especially high-elasticity assets.
Assets like SOL and BNB, as well as some high-elasticity targets with consensus, will be my key observation directions.
Ninth, written at the end.
The current market is not a time to go all in, but to choose directions, wait for turning points, and keep bullets.
What really determines whether you can turn things around is never which rise it is, but whether you can hold the right assets in the right cycle.
The situation is uncertain; you and I are both dark horses.
In the next phase, let's go all out together.