News
Studies Reveal Illegal Trade in Bitcoin
Summary: According to a study referred to as “Blockchain Analysis of the Bitcoin Market,” illegal transactions, scams, and gambling constitute around 3% of all bitcoin trade. The study also revealed that exchanges and trading desks represent about 80% of the total trade volume. Authors of a report made by the National Bureau of Economic Research demonstrated ...
According to a study referred to as “Blockchain Analysis of the Bitcoin Market,” illegal transactions, scams, and gambling constitute around 3% of all bitcoin trade. The study also revealed that exchanges and trading desks represent about 80% of the total trade volume.
Authors of a report made by the National Bureau of Economic Research demonstrated that the majority of bitcoin trade is not being conducted illegally. Authors Igor Makarov from the London School of Economics and Antoinette Schoar from MIT Sloan School of Management have revealed that in prior studies, the volume and economic amount of illegal trades were being overemphasized.
In order to endorse their assertion, the authors of the report called attention to a 2019 study that had been conducted, and had revealed that 46% of BTC (bitcoin trade volumes) were being made by illegal transactions. “First, Foley et. al (2019) intentionally drop all exchange-related volumes from their calculations, since they want to focus only on payments for goods and services. Since we show above that trading constitutes the main activity on the blockchain, this choice severely changes the denominator.”
Makarov and Schoar, in their study, imply that they agree with the overall concern over illegal transactions surrounding bitcoin. But they also state that it is “important to get the magnitudes of transaction activities right in order to understand what are the ultimate drivers of bitcoin value.”
