Traders shifted capital toward Monero (XMR) following a governance collapse at Zcash that culminated with the Electric Coin Company’s mass resignation in early January 2026. Market indicators and contemporaneous reporting show net outflows from ZEC and inflows into XMR during late 2025 and the opening days of 2026.
Data cited by market outlets documented a clear, near-term rotation. Monero “surged 20% as traders rotate from Zcash,” and noted an immediate window in which XMR rose roughly 5% while ZEC fell about 16.7% over the same span.
Earlier coverage captured steeper ZEC losses: a December 3, 2025 report said Zcash fell about 20% in a single day and roughly 50% over two weeks, whereas Monero posted much smaller daily declines.
On-chain flow indicators reinforced that picture. Sources flagged a divergence in Chaikin Money Flow (CMF): Zcash’s CMF turned negative, signaling net outflows, while Monero’s CMF spiked upward, consistent with increased inflows toward XMR.
Why traders favored Monero
Multiple outlets attributed the shift to both technical and governance signals. Reporting in December 2025 and January 2026 emphasized that the resignations at the Electric Coin Company (dated January 7, 2026) created a trust vacuum around Zcash’s future development and governance. That uncertainty amplified sensitivity to ZEC’s optional-privacy model versus Monero’s always-on privacy.
Observers quoted by industry sites framed the contrast succinctly: Monero’s mandatory privacy and “superior on‑chain activity and stability” appealed to traders seeking discreet, consistent utility; Zcash’s optional zk‑SNARKs were presented as more compliance-oriented but exposed the project to governance and regulatory trade‑offs.
In the words of one report, the ECC team resigned over governance disputes, prompting market participants to reassess ZEC’s roadmap and risk profile (news coverage dated Jan. 7, 2026).
Contextually, the rotation combined a governance shock with normal risk‑management behavior: when trust in a protocol’s stewardship erodes, capital often flows to perceived safer or purer alternatives within the same asset class. The sources reviewed linked price action, on‑chain money‑flow signals and narrative risk as mutually reinforcing elements of the shift.
