Layer 1 blockchain Sui's native token SUI jumped more than 14% over the past 24 hours, sharply outperforming bitcoin BTC$93,590.21 and ether ETH$3,217.55, as traders seized on speculation that the layer 1 blockchain could one day support privacy-preserving transactions.

The move stood out in an otherwise subdued market. Bitcoin rose about 1% over the same period, while ether gained roughly 1.2%, leaving SUI as the strongest large-cap performers of the day. This divergence points to a token-specific catalyst rather than a broad risk-on move.

Research-led rally

Sui's rally is likely rooted in research, not a product launch. A recent paper co-authored by Mysten Labs, which is the core creator and developer of the Sui blockchain, outlined how modern blockchains can incorporate privacy features without fully adopting the design of legacy privacy coins.

The paper, structured as a systematization of knowledge (an academic survey of existing work), laid out a formal framework for comparing privacy models across blockchains, categorizing privacy into distinct levels ranging from basic confidentiality, where transaction amounts are hidden, to k-anonymity and full anonymity, which progressively obscure the identities of senders and receivers rather than proposing a single new protocol.

It places Sui firmly within the account-based model, alongside Ethereum and Solana, and explores how such systems could implement confidential balances, limited anonymity sets, or sender-receiver unlinkability using cryptographic primitives such as homomorphic encryption and zero-knowledge proofs.

Crucially, the paper emphasizes trade-offs. Strong privacy guarantees tend to increase computational overhead, complicate support for some clients designed to be run in resource-scarce environments, and raise regulatory concerns.

Rotation toward digital cash

Throughout 2025, investors were increasingly on the hunt for 'countercyclical value'. During the second half of 2025, privacy coins such as Zcash and Monero sharply outperformed broader crypto markets, even as bitcoin and ether struggled amid macro pressure and dollar strength.

Analysts have framed the move as a rotation toward digital cash, assets designed for use rather than yield, where zero-knowledge proofs enable confidentiality without sacrificing settlement speed or selective compliance. The rally has been interpreted less as speculative excess and more as a signal that demand for financial privacy is re-emerging as a core market theme.

While the paper doesn't present a timeline to launch a privacy token for the blockchain, or present new technology, investors are hoping that its a signal for what's to come.