In his first public interview in eight months, Barry Silbert, co-founder and CEO of Digital Currency Group (CoinDesk’s parent company), placed an emphasis on privacy and privacy coins when discussing what protocols and areas he was following closely.

In an appearance this morning on CoinDesk TV’s "First Mover," Silbert said he believes privacy will be a draw for investors and mentioned two privacy coins he’s particularly excited about and focused on: zcash and Horizen's zen.

“Thematically, I think privacy is – and is going to become – a more popular investing theme,” Silbert said.

Zcash, currently the 51st largest cryptocurrency by market capitalization, was developed by Electric Coin Company (ECC). It recently announced a timeline for launching a variety of upgrades to the protocol that include privacy enhancements.

The Horizen protocol, whose token, zen, is the 101st largest cryptocurrency by market cap, is a sidechain platform that “focuses on scalable data privacy and enables businesses and developers to custom build their own public or private blockchains using its unique sidechain technology, Zendoo,” according to its website.

“Privacy is at the core of what we’re all building for our collective future. It’s the most significant threat to those who wish to control others, and the most significant hope for a fair and open economy,” said Josh Swihart, ECC’s vice president of Growth in a message. “It’s at the center of everything regulators are wrestling with right now – from self-hosted wallets to [decentralized finance]. It is the key issue, the critical feature.”

Justin Barlow, research analyst at crypto data firm The Tie, told CoinDesk in a message that compared to other sectors, privacy coins have performed relatively well this year.

"The average privacy coin is up about 550% year to date. For comparison, the average smart contract platform is up only about 350% and the average currency is up only around 175%," said Barlow. "Privacy coins have underperformed DeFi (~875% YTD) and exchange tokens (~1,250% YTD)."

Barlow said there is an argument for privacy coins as people value the untraceable transactions they offer for both legitimate and illicit activity.

"Over time, as bitcoin has become more mainstream, many in the community have realized that BTC transactions easily traceable," he said. "Those that have been proponents of the anonymity or now psuedo-anonymity of the Bitcoin blockchain might gravitate towards privacy coins. Keep in mind that Chainalysis has found that only 0.9% of zcash transactions are fully shielded so it isn't entirely clear how much demand is out there yet."

Silbert’s comments come amid both an exciting and troubling time for privacy and cryptocurrency. As bitcoin is booming and the non-fungible token craze continues, attention around cryptocurrencies is increasing generally – and privacy is a question that will again come to the forefront of a variety of debates.

In the first report from the Cryptocurrency Council on Innovation, a newly formed trade group, a former acting director of the CIA, Michael Morrell, wrote that "the broad generalizations about the use of bitcoin in illicit finance are significantly overstated" and "blockchain analysis is a highly effective crime-fighting and intelligence-gathering tool ... a 'boon for surveillance.'"

While the report was largely seen as a boon for bitcoin, in a Twitter thread on the report, Swihart noted, “That bitcoin crimes are overstated seems to be consistent with data. However, the argument that it's good that the U.S. can surveil everything is fatally flawed, and ironically, not even in the best interest of a surveillance state.”

“If U.S. law enforcement can trace and exploit public financial data, so can China, N. Korea, Russia and even the very ransomware attackers who the report claims demand ransom in something that protects privacy,” he tweeted. “This is a massive national security issue.”

Swihart said the report seemed like an attempt to shift risk from BTC to so-called Anonymity Enhancing Cryptocurrencies (AECs).

A week ago, the Quadrennial Global Trends report from the National Intelligence Council also warned that privacy will “effectively disappear.”

Moving forward, how the cryptocurrency world and regulators interact around privacy and privacy coins will be an ongoing question that has no easy answer.