Bitcoin Market Shift: Leading Speculators Oust Criminals

Criminals are not the dominant force behind Bitcoin transactions anymore as speculators took their place, a US Drug Enforcement Administration representative said.

Speculators became the dominant group behind the bulk of Bitcoin transactions and outstripped criminals and drug dealers, Bloomberg reported, citing Lilita Infante of the US Drug Enforcement Administration (DEA).

Five years ago, Infante’s analysis of blockchain data revealed that illegal activities accounted for about 90% of all Bitcoin transactions. However, the trend has changed completely, and currently, just 10% of transactions can be attributed to criminals, while speculators are currently the leading drivers of the market.

“The volume has grown tremendously, the amount of transactions and the dollar value has grown tremendously over the years in criminal activity, but the ratio has decreased. The majority of transactions are used for price speculation,” Infane noted.

Thus, Infante’s conclusions do not fit the widespread belief that Bitcoin is mainly used for illegal activities. However, criminals still constitute the main group of people who are using Bitcoin for its currency features rather than to just benefit from its price fluctuations.

The dark web, the internet space that can only be accessed via special browsers and allows users to stay anonymous, has supported cryptocurrencies for years. This is where criminals can trade illegal goods without being tracked down. However, even though Bitcoin does not operate with IDs, its blockchain network is immutable and records all the transactions, making it easier for law enforcement to find patterns and track funds.

“The blockchain actually gives us a lot of tools to be able to identify people. I actually want them (criminals) to keep using them (cryptocurrencies),” Infante said.

Infante is also part of a team of 10 experts called Cyber Investigative Task Force, which collaborates with agencies like the FBI and the Bureau of Alcohol, Tobacco, Firearms, and Explosives to conduct investigations related to cryptocurrency use on the dark web.

In January 2018, a study published by the Foundation for Defense of Democracies found that less than 1% of Bitcoin transactions has been related to criminal activity.