Key Insights: Bitcoin is no longer a cypherpunk asset, and institutional investment has created a growing divide within the crypto community. Arca’s Katie Talati says some early Bitcoin users
Bitcoin is facing an identity crisis. In a mid-September 2026 interview with The MilkRoad, Arca’s head of research, Katie Talati, said longtime investors are uneasy as the cryptocurrency shifts from a counterculture asset to a Wall Street mainstay.
Talati says that the “crypto OGs,” are watching Bitcoin move from its cyberpunk roots into boardrooms and CNBC talking points. Many are unhappy with the change.
She argues this friction is driving renewed interest in privacy coins. Talati notes that some original Bitcoin backers now prefer assets that “still feels private and uninstitutionalized”. She is pointing to coins like Zcash as an alternative.
Talati warned that a “real split [is] forming in crypto right now,” as early users resent Bitcoin’s corporate image. They see Bitcoin trending on CNBC and being promoted by large firms like BlackRock. That’s a far cry from its early ethos.
This shift is spurring some Bitcoin supporters to question the coin’s direction. Talati says the backlash stems from a sense that Bitcoin’s original anti-establishment identity is being lost.
In her view, that discomfort has helped fuel interest in privacy-focused assets. Investors who value anonymity are rotating into coins that feel more “private and uninstitutionalized.”
This divide in the Bitcoin crypto community comes as major players push Bitcoin’s mainstream adoption. For example, several large firms recently backed Bitcoin security initiatives, and U.S. regulators have approved multiple Bitcoin spot ETFs.
To veteran holders, these developments signal that Bitcoin is now a conventional financial product. Talati’s comments suggest that as Bitcoin becomes more corporate, a subset of users is hedging by moving into lesser-known tokens with privacy features.
Crypto analysts have reported that privacy coins such as Zcash (ZEC) and Monero (XMR) have been on the rise this summer. They performed considerably better than most other cryptocurrencies.
At the moment, Zcash’s price is almost $1,137, and Monero’s is near $510, having recovered from a recent bearish swing.
The rotation in crypto has occurred as investors’ interests have shifted from Bitcoin, AI tokens, and memecoins to privacy coins, which offer a degree of anonymity that other cryptocurrencies lack.
Privacy coins lead crypto, up 213% | Source: Glassnode Institutional investors are also taking a greater interest in privacy coins. For instance, Grayscale Investments filed to convert the Zcash Investment Trust into a spot ETF in May 2026. It would become the first-ever exchange-traded fund in the U.S. focused on a privacy coin.
As a result, Grayscale’s request likely pushed ZEC’s price higher, with the overall increase indicating institutional investors’ growing interest in privacy coins.
The increased interest from regulators in privacy coins can also be seen as a positive sign. TheCoinRepublic reported that the SEC closed a review of privacy coin issues without enforcement action. Thus, the agency eased uncertainty for these markets.
Crypto investors jumped at the news, with some assuming that approval of a Zcash ETF would herald the arrival of more institutional flows.
Whale Moves $13.65M in ZEC to New Wallet | Source: X Multicoin Capital co-founder Tushar Jain even revealed his firm has been amassing a sizable position in ZEC since the beginning of 2026. They believe that it could serve as a macro hedge.
These developments illustrate the larger trend Talati described: as Bitcoin cedes its outsider image, traders are taking a fresh look at alternatives.
Analysts say the recent rally in ZEC (up roughly 113% year-to-date) and XMR reflects “stronger demand returning to privacy-focused assets”. For now, the oldest Bitcoin supporters remain divided. Some embrace its Wall Street success, others chase the anonymity of privacy coins.
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