Privacy coins are some of my favorites. Although they do pose significant policy challenges, their use case is undeniable. Those like Monero, Raptoreum, Verus (basically the PoW CPU mineable coins) will always have a use case, that obviously being privacy.

The potentially big downfall (or pitfall to mainstream adoption) that I can clearly see, is the policy side of regulating privacy coins. Its nice to live in a fantasy world and think privacy coins will be an unregulated wonderland forever, however, like everything to ever exist, they will be regulated (sooner than later too). Now, if Privacy coins remain in their own niche, with sort of minimal regulation, I think they maintain their use case. If governments decide that privacy coins being adopted pose a huge risk to control; and proceed to come down hard on them from a regulatory perspective, their prospect may be killed.

Hopefully the primary more so than the latter applies, but only time will tell. Until then, I hop privacy coins continue to adapt and get ready for the coming regulatory framework battles.