Increasing use of privacy tools like CoinJoin and mixers shows whales' efforts to obscure transaction details.
The adoption of private transactions by whales could set new trends in the broader cryptocurrency market.
Rising privacy in crypto may challenge regulators aiming to maintain transparency and prevent illicit activities.
CoinJoin transactions in the last two years have increased dramatically, and have tripled in a year. Although some attribute the rise in the usage of Bitcoins to cyber criminals changing the proceeds of their criminal activities for Bitcoins, the actual story is in the patterns of demand and supply for bitcoins.
As per new data from Chainalysis, the hacking losses this year were $ 2.2 billion that is just 0.45% of the total Realized Cap Inflows of $ 377 billion of Bitcoin. While hackers, of course, have been involved, the larger phenomena is much more associated with fraud perpetrated by large institutional and private investors who flout privacy priorities in Bitcoin transactions.
The Surge in Privacy Transactions
As seen with CoinJoin transactions where several users pool their coins to provide anonymity to the process, its volume is not a measure of it being used for criminal activities alone. This rise shows that the true demand for anonymity is driven by the right investors who include whales. Such transactions are considered as a tool for protecting big volumes of BTC swaps between institutional entities like custodians, ETFs, and companies such as MicroStrategy.
https://twitter.com/ki_young_ju/status/1872162768570425845
About 1.55 million BTC entered accumulation addresses in 2024, and many of these addresses belong to these large holders. Whales are starting to use CoinJoin to make purchases and sales while remaining relatively anonymous and avoiding creating a stir around their investments.
Although the BTC inflows in the addresses known by institutions can be easily tracked, there is still a massive amount of 240,000 to 420,000 BTC with unknown owners.The recent choice of whales to employ privacy tools is another sign of a change in the way big investors regard Bitcoin. Whether this development will put pressure on regulations to clamp down or will inspire the creation of new privacy safeguards is yet unclear.
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