Ransomware Starts with Reconnaissance, Not Bitcoin

When Bitcoin Dives, Do Cybercriminals Panic or Pivot to Gold?

Rocky the Raptor here, RPost’s cybersecurity product evangelist. I’m here like many, watching the tech stock charts, wishing I had cashed out of my tech investments weeks ago. And, of course, the same with the crypto charts. But I’m looking in hindsight; the cybercriminals are looking in the now. 

Whenever Bitcoin takes a sharp plunge, one question inevitably comes up in security circles: What happens to cybercriminals who collect ransom in Bitcoin when the value drops?

And a close cousin to that question: At what point does a Bitcoin sell-off get fueled by cybercriminals cashing out -- and where does that money go next?

Bitcoin and Cybercrime: A Symbiotic Relationship

For years, Bitcoin has been the currency of choice for ransomware gangs and extortion crews. Why? Pseudonymity (not anonymity, but close enough), global liquidity, ease of cross-border transfer, and, historically strong price appreciation.

In bull markets, ransomware isn’t just crime; it’s speculation. Collect today. Hold tomorrow. Cash out later. But bear markets change behavior. 

When Bitcoin Drops, Pressure Rises

When Bitcoin plunges, cybercriminals face the same problem as any investor -- asset devaluation. Here’s what tends to happen: 

• Faster cash-out cycles. Criminals are less likely to “HODL” (Hold on for dear life) ransom payments in Bitcoin. Instead, they move faster to convert crypto into dollars, stablecoins, or hard assets (e.g., gold). 
• Increased operational risk for cybercriminals. Rushed laundering of funds means more mistakes, sloppy mixing, reused wallets, poor operational security; essentially mistakes keeping the cybercriminals obscure can nullify the old saying, “security by obscurity.” 
• Higher ransom demands. If Bitcoin is down 50% since October highs, attackers may demand more Bitcoin to compensate for the loss of value. Victims see bigger numbers, even if the dollar value is the same.

Is Bitcoin’s Drop Ever Fueled by Criminal Cash-Outs?

Short answer: Yes. Cybercriminals hold a huge amount of Bitcoin. Consider the United States being one of the largest holders of Bitcoin, which is essentially confiscated from criminals. The U.S. holds about 1/3 the amount of Bitcoin as the infamous Bitcoin founder, Satoshi Nakamoto. 

Assuming the United States just has a tasty sampling of cybercriminal Bitcoin assets, accumulated through ransom payments and other cybercriminal movements of money, cybercriminals have a grand incentive to keep the price high, so they can drip cash out and convert quietly to other assets to diversify. 

But once the price drops in a frenzy that can’t be controlled in their collective minds, these cybercriminals may start dumping. Remember, to them, acquisition of these Bitcoins was essentially free so selling even at a lower than preferred price brings liquidity to their profits. And when they exit Bitcoin? They don’t usually move these same funds back into crypto. Why? Because the cybercriminal risk of being traced by authorities is highest at transaction time, once they exchange Bitcoin for gold, they are likely to keep it in gold for the foreseeable future.

Why Gold (and Other Hard Assets) Start Looking Attractive

Historically, criminals (and nation-states, for that matter) prefer assets that are portable, durable, difficult to trace, accepted globally and resistant to digital seizure.

Sound familiar? That’s gold. In times of crypto volatility, ransomware operators increasingly diversify into gold-backed instruments and physical commodities. And, this could be the reason the Bitcoin price is decoupling from the gold price. Bitcoin selling by cybercriminals in material volumes, putting downward price pressure on Bitcoin may become buying into gold putting upward price pressure (or at least stabilizing) price of gold.

What This Means for Cybersecurity

Here’s the key takeaway most people miss. Crypto volatility changes attacker behavior, but not attacker motivation. When Bitcoin drops, attacks don’t stop – they accelerate. Proven methodologies prevail. Cybercriminals still need context around who is communicating with whom and when to run ransomware and extortion campaigns.

And that brings us back to where attacks really begin -- not at payment time, but long before the ransom note appears. 

Ransomware Starts with Reconnaissance, Not Wallets

Before Bitcoin ever enters the picture, attackers compromise third-party inboxes, read email threads, learn who approves payments, identify sensitive documents, and map trust relationships.

That’s the real battleground. Cybercriminals win when they steal context early, and lose when defenders (YOU) see cybercriminal reconnaisance first by use of RPost’s RAPTOR™ AI security. Seeing it first (even programmatically with RAPTOR), empowers you to pre-empt the crime.

Whether ransom is paid in Bitcoin, gold, or something not yet invented, preempting reconnaissance is still the most effective defense.

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