In a recent report by Nickel Digital Asset Management, the largest gripe that institutional investors had with investing in crypto was security. While security and illegitimate activities are not the same, they still have a correlation. Well, the good part is that a recent report from Chainalysis suggests that Illegal activities in the crypto space are just 0.15% of the total transaction volume. While the value of such transactions has doubled since 2020 from $7.8 billion to $14 billion in 2021, the overall trading volume has increased much more.
The overall crime rate on the decline
The Chainalysis report suggests that the total growth of the crypto economy is happening much faster than the crime rate growth. This is the reason while the value of funds sent to illegal addresses has almost doubled since 2020, the percentage it represents in the total economy has dropped from 0.62% to 0.15%, which is less than 1/4th. This is a good thing, and as we progress, this percentage will become even more insignificant.
In 2021, the total transaction volume in the crypto space was $15.8 trillion. This is a 567% growth as compared to last year, which shows how far we have come. Compared to such growth, an almost 100% increase in the crime rate is understandable. It is not justifiable though, and with time and regulation, this can also be controlled. The decline in the overall percentage of illegal activities also shows that crypto is not for criminals but has valid use cases as opposed by many.
The last 5 years have seen a downtrend (mostly)
Chainalysis also published the same data for the last 5 years. And it is clearly visible that since 2017 we have seen a downtrend in the overall percentage of illegal activities in crypto. In 2017, it was at 1.42%; in 2018, it was 0.76%; in 2019, it increased to 3.37%, and in 2020 it was at 0.62%. The spike in 2019 can be attributed to the fact that we saw a pretty long bear market, and it resulted in an overall low trading volume.
Note!
Yes, we are seeing a percentage decline in the illegitimate activities in the crypto space, but still, the numbers are large. And Chaianlysis thinks that it can still have a pretty negative impact overall. The chances of restrictions by the government stay, and unaware users are still at risk of being tricked by such individuals.
What are your thoughts as the overall percentage of Illegal activities in the crypto space went down in 2021? And are you positive that the trend will continue in 2022? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Regulation by the SEC can boost crypto prices: Here’s why?
