Darknet Market Crypto Revenues Hit All-Time Highs in 2020

A study revealed that darknet markets have astonishing figures so far in 2020, despite the coronavirus pandemic, but the dynamics changed compared to the last year’s numbers.

Darknet Vendors Surpassed $800 Million in Revenues Despite Covid Pandemic

According to the Chainalysis report, darknet marketplaces surpassed the $800 million threshold worth of cryptocurrencies in revenue made in 2019, the all-time high. However, the exact figures for 2020 will be released in the “Chainalysis 2021 Crypto Crime Report” in January 2021.

However, the research firm noted that the overall number of purchases and customers fell significantly, but those with higher values, boosting the rally highlighted in the study. The most used cryptocurrencies in the transactions have been bitcoin (BTC), bitcoin cash (bch), litecoin (LTC), and tether (USDT).

Also, the number of active markets has declined in the wake of the Covid-19 crisis globally. Chainalysis explains that the pandemic could be the main reason behind such dynamics in this year’s trend across the darknet markets, but according to experts consulted for the research, there are other reasons:

It appears that ever-increasing competition combined with the efforts of law enforcement are causing the darknet market ecosystem to consolidate to a few big players — a pattern common to the technology industry and other markets, both legal and illegal.

Dynamics in Bitcoin Prices

Chainalysis found that darknet market activity seemed to be “impervious” to bitcoin market activity until this point of the study. They explained further on the matter:

Fluctuations in Bitcoin’s value, which have always been common, rarely appeared to play a role in darknet market consumers’ purchasing activity. However, when Bitcoin’s price began to fall in mid-March following the first round of U.S. lockdowns, so too did darknet market activity.

But according to the research firm, people should expect that such a change would prove only to be temporary.

Some of the sellers who spoke with Chainalysis for the research blamed the pandemic because it affected their operations. One example is the increasing number of customer complaints due to the delay in the deliveries, and similar situations forced some marketplaces to close temporarily.