Monero (XMR) Has Replaced Bitcoin (BTC) as the King of Dark Web Transactions

Bitcoin (BTC) was once the king of illicit transactions on the Dark Web. Back in 2016, it accounted for a staggering 97% of all cryptocurrency activity

Bitcoin (BTC) was once the king of illicit transactions on the Dark Web. Back in 2016, it accounted for a staggering 97% of all cryptocurrency activity tied to illegal dealings, according to TRM Labs. But, fast forward to 2022, and that number dropped sharply to 19%. TRM Labs predicts that by 2024, Bitcoin’s share will shrink further to only 12%.

So, what happened? Simply put, the limitations of Bitcoin - particularly its public blockchain transparency - have pushed illicit markets toward more private alternatives.

One key driver of this shift is the development of privacy-based cryptocurrencies like Monero (XMR), Zcash, and Dash. Unlike Bitcoin, these coins are designed to provide almost total anonymity, making it practically impossible to trace transactions.

White House Market, a major player on the Dark Web, recognized this early. In 2020, they stopped accepting Bitcoin altogether and went Monero-only.

Their reasoning was clear: “The Bitcoin workaround was supposed to be there just to help with the transition to XMR… therefore, we are now Monero only, just as planned.”

Research from ScienceDirect also supports this shift, suggesting that privacy coins are closely tied to Dark Web activity.

Stablecoins and Tron Taking Over

Interestingly, it’s not just privacy coins that are taking the lead. TRM Labs reports that Tron (TRX) holds the top position in illicit activity with 58%.

Another report from Chainalysis reveals that stablecoins now account for 63% of the total illegal volume of transactions. Even large illicit marketplaces are using stablecoins for smoother and faster transactions.

For instance, Elliptic researchers uncovered $11 billion in illicit trades using USDT on Cambodia’s Huione Guarantee marketplace in July 2024. Both privacy coins and stablecoins are becoming the go-to tools for anonymous and efficient transactions on the Dark Web.

Law Enforcement Challenges

The openness of Bitcoin has always had a double-edged nature. On the one hand, it made the currency less attractive to criminals; on the other hand, it made it possible for the authorities to trace and shut down illegal trade.

Thanks to Chainalysis and Elliptic software, the authorities have been capable of successfully disassembling such high-profile platforms as Silk Road in 2013, AlphaBay in 2017, Hydra in 2022, and Incognito Market in 2024.

But with privacy coins, the game has changed, tracking transactions through Monero or Zcash is a major hurdle.

Even though Japanese law enforcement recently made their first arrest linked to Monero transaction analysis, the complexity of these privacy-focused coins poses a serious challenge worldwide.

The Balancing Act Between Privacy and Security

This shift from Bitcoin to stablecoins and privacy coins is a two-edged sword. While the diminished role of Bitcoin in criminality might make it more acceptable as a legitimate financial instrument, and more investors will be drawn to it, stablecoins and privacy coins make it more challenging for law enforcers to trace illegal transactions.

Certain countries have even prohibited privacy coins, while stablecoins have been scrutinized. The challenge is to strike the right balance between technological advancement and regulation so that privacy is possible without undermining security.