[ad_1]
Despite a year 2020 which saw the price of bitcoin reach all-time highs and set new all-time highs for stability, it is not too difficult to find Bitcoin FUD spreading. But a recently released blockchain analysis shows the ‘Bitcoin is for criminals’ narrative is weaker than ever.
The FUD keeps coming
Yesterday Janet Yellen, the new candidate for Secretary of the Treasury, highlighted a common narrative that many believe throws unfair light on the original cryptocurrency, suggesting that the government will try to regulate its use.
“I think a lot [cryptocurrencies] are used – at least in a transactional sense – primarily for illicit financing, ”Yellen said. “And I think we really need to look at ways to reduce their use and make sure money laundering doesn’t happen through those channels.”
Last week, European Central Bank President Christine Lagarde said bitcoin is a “highly speculative asset that has carried out interesting and totally reprehensible amusing deals and money laundering activities.”
Even some industry-focused publications broadcast the ‘Bitcoin is for criminals’ FUD, without acknowledging that criminals have been using cash for much longer, that supposedly regulated financial institutions frequently facilitate major crimes, that criminals have been using cash for much longer. Anonymous cryptocurrencies would be much more useful to criminals than bitcoin or that there are many other arguments suggesting that this narrative is unfair.
Cryptocurrency leaves criminals behind
According to a summary of the “2021 Crypto Crime Report” from blockchain analytics firm Chainalysis, the proportion of cryptocurrency-related crimes has declined significantly over the past year.
“In 2019, criminal activity accounted for 2.1% of all cryptocurrency transaction volume, or roughly $ 21.4 billion in transfers,” the company found. “In 2020, the criminal share of all cryptocurrency activity fell to just 0.34%, or $ 10.0 billion in transaction volume.”
To put it another way: The volume of cryptocurrency transactions that Chainalysis could identify as “criminal” represented only 2.1% of all transactions in 2019 (although Yellen seems confident in claiming that the technology is “primarily aimed at the illicit financing ‘), by far the highest proportion Chainalysis has found since 2017. By 2020, that figure had fallen to less than half of 1 percent, fueled largely by a surge in global economic activity.
Chainalysis noted that cryptocurrency-powered ransomware activity increased by 311% in 2020, compared to 2019, and even that figure is likely low due to underreporting. But that still only represented 7% of the total funds received by criminal cryptocurrency addresses, which in itself is a very small proportion of all cryptocurrency transactions during the year. Funds received through scams and darknet markets were by far the top categories of criminal transactions in 2020.
The image painted by this report is unlikely to significantly change the opinion of regulators on Bitcoin or eliminate the allure of FUD-focused headlines and media coverage. But there is a clear story told by Bitcoin’s 2020, although it is not the narrative that everyone will adopt: BTC’s journey to global reserve currency status will always exceed its use on the fringes of the dark web.
[ad_2]
Source link