Crypto ATMs are a popular way for people to exchange cash for cryptocurrency. The first Bitcoin ATM was launched in Vancouver, Canada, in 2013 by a company named Bitcoiniacs and Robocoin.
What Happened? An AltIndex report indicates that the number of Bitcoin ATMs installed worldwide dropped to a two-year low in October 2023. Installations narrowed down by 7,000 on a year-to-date basis to 32,500, which marks the biggest drop in crypto history.
The functioning of a crypto ATM is like that of a traditional ATM and includes a one-time verification process, requiring a cryptocurrency wallet to receive the purchased digital assets, providing a crypto buy/sell option, receiving payment via cash, credit or debit card, or electronic transfer, and producing a receipt of the transaction.
Despite 2023 seeing Bitcoin levels breaching the $35,000 mark and optimism surrounding the spot Bitcoin ETF approval, uncertainties around regulations and crypto scams brought the number of ATMs installed down to its 2021 level.
In December 2022, Bitcoin ATMs peaked at an all-time high level of 39,100 and, since then, have dropped consistently. CoinATMRadar data reflects that more than 1,500 ATMs were removed in January 2023, while, in March, the number of Bitcoin ATMs dropped by around 3,600. July was the worst recorded month, with more than 4,000 Bitcoin ATMs removed. In July, BTC prices saw a drop of 4%.
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Why Does It Matter? Brandon Mintz, the CEO and founder of publicly traded Bitcoin ATM operator Bitcoin Depot, says that this declining trend is due to operators turning off unprofitable ATMs or going out of business completely, CoinDesk reported.
He added, “This creates an opportunity for us that allows us to further increase market share through acquisitions and organic kiosk growth in additional retail locations.”
A Research and Markets report estimated that the global crypto ATM market is at $73.62 million in 2023 and is expected to reach $581.01 million by 2028, marking a CAGR of 51.16%.
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Which Country and Company Leads?
Geographically, the U.S. leads in the number of Bitcoin ATMs, which is 18 times higher than that of Europe (1,500). Asia has the lowest number of ATMs that support cryptocurrencies, with less than 350.
Company-wise, General Bytes remains the largest Bitcoin ATM manufacturer globally, with a 32.6% market share in October 2023, and Genesis Coin, which is the second-largest, has a 22% market share. BitAccess and Bitstop each have a 21.3% and 8.3% market share, respectively. Rockitcoin, Coinhub and Athena Bitcoin are among the other manufacturers.
Legal Legislation For ATM Withdrawals
Bitcoin ATMs have become a hub for scams and exploits due to the nature of transactions. In the last week of October, California legislators proposed a new bill that would put a cap on crypto ATM withdrawals at $1,000 per day in order to protect against scams, as reported by Binance.
The bill, if approved, is likely to be effective beginning January 1, 2024. It would limit operators’ fees to $5 or 15% (whichever is higher) beginning in 2025.
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