The SEC's Gary Gensler reiterated on live cable TV that "Bitcoin is a highly speculative volatile asset that is used for illegal activity."

Then, by assuming that any cash that the surveyed consumers do not fess up to holding must be held for nefarious purposes, he concludes that 34 to 39 percent of all currency in circulation is used by criminals.

The latest Chainalysis numbers estimate that transactions involving illicit addresses made up only 0.12 percent of the total cryptocurrency transaction volume in 2021 and 0.24 percent in 2022.

Other assessments have gauged the share of illicit Bitcoin transactions at 0.1 percent to 5.1 percent in dollar‐​value terms (which the intergovernmental Financial Action Task Force has interpreted to likely be a floor). Even the high‐​end figures in the Review of Financial Studies article estimated that less than a quarter of the total dollar value of Bitcoin transactions through time was associated with illegal activity.

When Bitcoin first emerged, law enforcement officers were "panicking," Meiklejohn says. "They thought these technologies were dangerous and made it harder for them to do their job." But as the arrests and convictions have rolled in, "there's a steady shift toward seeing cryptocurrency as a tool for prosecuting crimes." Even in the strange new world of Bitcoin, FBI Assistant General Counsel Brett Nigh said in September 2015, "investigators can follow the money."