Chainalysis: Bitcoin transactions on darknet markets rose throughout 2018 to an average of $2M/day, nearly double the activity measured at the start of the year
NEW YORK (Reuters) - Use of bitcoin as a form of payment doubled in 2018 on darknet market sites, where users can buy anything …
Context & Ripple Effects
This report lands mid-arc for Chainalysis: months earlier, its own data showed Bitcoin flowing to the 17 largest crypto processing services collapsing from a $412M September 2017 peak to $69M by June 2018 [[a:932035]], which read as darknet activity going quiet. The new finding flips that interpretation — payment volume on the markets themselves nearly doubled through 2018 to $2M/day, meaning activity consolidated onto-market rather than disappearing.
It also sets up the measurement franchise Chainalysis has built since: later reports tracked darknet revenue peaking at $3.1B in 2021 before falling to $1.5B in 2022 [[a:835509]], and by 2024 estimated $40B in total illicit crypto volume with criminals shifting from mostly bitcoin to stablecoins [[a:882982]]. The 2018 doubling is the baseline against which that whole migration is measured.
First-order effects
- Darknet market operators gained a payment rail that was growing, not shrinking, despite the visible collapse of third-party processing services — buyers and sellers could transact directly on-chain at roughly twice the early-2018 rate.
- Law enforcement and compliance teams lost their clearest chokepoint: with processing-service inflows down ~83% from peak, interdiction had to move from intermediaries to raw blockchain analysis, exactly the product Chainalysis sells.
Second-order effects
- Demand for obfuscation followed the volume: Bitfury later measured darknet entities' share of bitcoin sent to mixers jumping from 1% in Q1 2019 to 20% in Q1 2020 [[a:953867]], a direct knock-on of more traceable on-chain activity.
- Market structure consolidated under pressure — exit scams, DDoS attacks, and takedowns cut active darknet markets from a peak of 59 in February 2020 to 37 by November [[a:960750]], concentrating flow into fewer, larger venues like Hydra.
Third-order effects
- If the pattern holds, the asset itself becomes the moving target: Chainalysis's 2024 estimate shows illicit flows shifting from bitcoin to stablecoins, so enforcement built around Bitcoin's semi-transparent ledger faces a structurally harder problem.
- The durable winner is the blockchain-analytics sector — Chainalysis's ability to publish these series turned illicit-flow measurement into a compliance product line, making forensic firms de facto infrastructure for exchanges and regulators alike.
The trend: Illicit crypto activity keeps migrating — across services, markets, and now from bitcoin to stablecoins — while blockchain-forensics firms like Chainalysis convert each migration into measurement products and regulatory relevance.