Monero, the second largest privacy-focused anonymous cryptocurrency behind Dash, has recently demonstrated a rapid increase in value after being adopted and integrated by Bithumb, the world’s largest cryptocurrency exchange by volume.
Over the past 12 months, South Korea evolved into a major cryptocurrency market, becoming the biggest Ethereum exchange market by trading volume. A significant increase in demand from professional and institutional investors in Asia allowed Bithumb to overtake US-based exchanges such as Bittrex and Kraken to become the global cryptocurrency market’s leading digital currency trading platform.
Last week, Bithumb announced its plan to fully integrate Monero by August 27. It revealed that deposits for Monero users will be open by August 23. By the end of this month, Monero investors and traders will be provided with drastic improvement in liquidity, due to the integration of Monero by Bithumb. In its peak days, Bithumb processes around $700 million worth cryptocurrency trades on a daily basis, well above the trading volumes of other cryptocurrency trading platforms such as Poloniex and Bittrex.
Since its early days, Monero has secured its title as the most transparent and secure anonymous cryptocurrency. Supporters of Monero firmly believe that Monero is the only anonymous cryptocurrency in the market that had launched transparently, without pre-sales and conditional mining deals. For instance, Bytecoin and Dash launched with token pre-sales and as a result, Dash had struggled to recover from its negative reputation in 2015. ZCash also received criticisms from the community for its conditional mining deal, which enforces miners to provide a portion of their earnings from ZCash mining to the ZCash development team.
Still, for many years, Monero has had difficulty appealing to the general consumer base unlike Dash. Through Jaxx and many user-friendly wallet and trading platforms, Dash attracted many users and investors. Due to its efficient and practical marketing, Dash evolved into a leading cryptocurrency why Monero struggled to become a major cryptocurrency.
The integration of Monero by Bithumb is expected to allow Monero to overtake Dash in terms of trading volume and for the first time since its launch, secure an active trading community apart from Poloniex. Already, the market has responded to the announcement of Bithumb, as even prior to accepting deposits, the market cap and price of Monero increased significantly.
Bithumb’s decision to integrate Monero also sets a positive precedent for the cryptocurrency industry and the community’s viewpoint on anonymous cryptocurrencies. For years, Monero was used as one of the main payment methods on some of the world’s largest dark web marketplaces. The now-defunct AlphaBay relied on Monero transactions to process deals on dark web. Criminals and money launderers also have been using Monero in order to anonymously transact amongst each other.
Most recently, it was revealed that funds from the accounts of the WannaCry ransomware distributors were moved to several Monero accounts through ShapeShift. As a response, the ShapeShift team announced that it would assist law enforcement in tracing the transactions but it would be difficult considering that Monero transactions are completely private.
Exchanges have been reluctant on listing Monero due to Know Your Customer (KYC) and Anti-Money Laundering (AML) policies. As an anonymous cryptocurrency, Monero has obviously been the go-to choice for online criminals. Hence, law enforcement agencies expect digital currency trading platforms that have integrated Monero to help the government to crackdown on criminals using Monero to launder money and finance criminal activity.
In February, DeepDotWeb reported that the FBI and many other law enforcement agencies were concerned with the applicability of Monero and its anonymous nature.
“There are obviously going to be issues if some of the more difficult to work with cryptocurrencies become popular. Monero is one that comes to mind, where it’s not very obvious what the transaction path is or what the actual value of the transaction is except to the end users,” said Special Agent Battaglia.
The adoption of Monero by Bithumb will likely trigger a surge in demand towards anonymous cryptocurrencies in the upcoming months, especially in Monero. Users of bitcoin that are conscious about their transactions and the traceability of their payments will likely switch over to Monero as its liquidity will drastically increase with Bithumb.