The two biggest factors responsible for the escalating bitcoin price and demand are none other than money laundering and darknet business.
Please note that these are additional reasons to the reasons we already discussed in first chapter where we mentioned how trading volume and prices are manipulated using cross-trading of Tether cryptocurrency and using trading bots such as Markus and Willy.
1. Darknet Business
I have already discussed in detail how Bitcoin helps the darknet marketplaces to make millions of dollars in daily sales. I will briefly explain how darknet is linked with Bitcoin’s rising price.
To shop online from any of these Darknet marketplaces, a user just needs two things. A TOR browser and a decentralized currency such as Bitcoin, to hide his IP address and online identity respectively.
Silk road played a vital role in introducing bitcoin to darknet community and thus the demand for bitcoin started. Silk road provided the initial momentum for bitcoin prices to rise due to a huge demand by darknet users.
By the time Silk Road was taken down by law enforcing agencies in 2013, over 144,000 bitcoins, worth $28.5 million at that time were seized from Silk Road marketplace. Imagine how popular is bitcoin within the darknet community for daily transactions.
BTC prices fall instantly after the start of a new year due to slow activity on darknet marketplaces which leads to low btc demand.
2. Money Laundering
Throughout history the elite of the society has always looked for inventing new ways to hide their real income in order to avoid taxation or confiscation of wealth by the law enforcement agencies.
The data below shows how much federal tax an American citizen pays each year. The chart shows the average effective federal tax rate by income level, as a percentage of income.
Source: Tax Policy Center & Time
According to this data of 2015, If you make less than $10,000 per year, you'll pay 6.7% of that in federal taxes but if you make over $1,000,000 a year than you will be bound to pay 34.1% of that amount in taxes. Note that the tax rate for super rich is 41.35%
Which in laymen terms mean, as you grow big so does your federal tax rate and responsibility towards the society. If this system is strictly followed, you won’t be able to find a single beggar in entire USA but unfortunately, all taxes are paid mostly by the working class while the elite conceals their true wealth to avoid taxation through money laundering.
Social welfare is not a topic of interest for the elite and hence they will try all methods to hide their assets and show less than 10% of assets in paper for taxation. They do it through several methods and the most popular one today is online money laundering through cryptocurrencies.
Cryptocurrencies are no doubt a digital gold only for the Elite to transform their dark money into white, transfer their corrupt money abroad with no finger prints attached thanks to the decentralized structure of bitcoin.
BlackRock’s CEO Larry Fink who is the head of the largest asset management firm in the world, titled bitcoin as an index of money laundering. He said:
"Bitcoin just shows you how much demand for money laundering there is in the world," Fink
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Mohammad
7/28/2018
Bitcoin
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