Surprise, Surprise. The Use of Bitcoin in Money Laundering is Actually About the Same as USD

Bitcoin maximalists and anti-crypto crowds, take note

A fool threw a Bitcoin stone in the money laundering well, and CNBC’s Joe Kernen ran with it, which made us ask: Is Bitcoin Really Used 606 Times Less than USD To Launder Money? 

So, where are we now in the debate on whether Bitcoin is used more or less than USD in money laundering? Nowhere, as far as we can tell. Somebody needs to fill this gap, so this post is our attempt to estimate the respective frequencies of Bitcoin vs USD in money laundering. Admittedly, this is still somewhat “back of the envelope” but we do believe it is more robust than anything else out there. 

Let us spill the beans and give you what we have found. Our model estimates that during the 2017-2021 period, USD is used (as a percentage of its average money supply), between 5.0 percent and 12.4 percent, with the midpoint being 8.7 percent. Bitcoin, as a percentage of its average circulating supply over the same period, is used…. Drumroll, please. 8.8 percent! 

It is funny how these numbers shook out. Here is the visual illustration:

Thus, we conclude that the use of Bitcoin in money laundering is about the same as USD. Here is how we came to that conclusion: