Darknet markets are increasingly reverting to Bitcoin (BTC) as their primary cryptocurrency. This trend stems from rising liquidity and accessibility challenges associated with privacy-focused coins like Monero (XMR), according to insights from Eric Jardine, the cybercrime research lead at Chainalysis.
“After major exchanges delisted XMR, we observed a significant increase in Bitcoin inflows,” Jardine stated in a recent interview with CoinDesk. “Reduced accessibility is steering users back toward Bitcoin.” This shift highlights how critical accessibility and liquidity are in the realm of cryptocurrency transactions.
Previously, many Western darknet markets had either fully transitioned to Monero or operated with it alongside Bitcoin. However, following delistings, XMR’s presence has diminished markedly. Major exchanges such as OKX, which removed XMR along with other privacy-focused tokens like Dash (DASH) and ZCash (ZCH) at the end of 2023, contributed to this decline.
Furthermore, Binance’s announcement in February 2024 to plan the delisting of Monero reinforced this trend. The exchange articulated, “When a coin or token no longer meets this standard, or the industry changes, we conduct a more in-depth review and potentially delist it.” This scrutiny has prompted many users to consider Bitcoin as a more practical option.
On-chain data from BitInfoCharts indicates a significant decline in Monero transactions, halving from the same time last year. As Jardine noted, “To be an effective medium of exchange, you need a certain amount of liquidity and a certain amount of accessibility.” The implications of this are far-reaching, especially when considering the broader crypto ecosystem.
It’s crucial to understand that illicit cryptocurrency transactions constitute only a minor share of total crypto activity. Jardine pointed out that, “Typically, illicit transactions constitute at or below 1% of total crypto activities.” Although addressing these issues is vital, overgeneralizing cryptocurrencies in a negative light can be inaccurate and counterproductive.
According to Chainalysis data, only about 0.14% of crypto transactions, amounting to approximately $50 billion, are linked to illicit activity. Interestingly, this survey noted an increasing trend in the use of stablecoins as a mechanism for such transactions.
In response, stablecoin issuers are taking action against illicit activities. The Tron-led T3 Financial Crime Unit has frozen over $100 million in illicit funds, demonstrating a proactive stance towards combating these challenges.
Jardine also highlighted that law enforcement agencies prioritize their focus on darknet markets that are significantly involved in the fentanyl trade, which poses heightened risks and consequences. This focus complicates the operating environment for darknet markets, as attracting law enforcement attention can jeopardize their sustainability.
In conclusion, the recent trends in cryptocurrency usage among darknet markets illustrate the complexities and evolving nature of this space. As viable options diminish for privacy-focused coins, it seems that Bitcoin may be reclaiming its stronghold, guiding users toward an alternative that balances accessibility with functionality.
