It has never been easier to buy Bitcoin with a credit card online, and it only takes a few clicks to complete the transaction. Those who prefer using cash to purchase BTC can do that via specialized crypto ATMs.
These ATMs work like the ones we use for fiat money, with the important difference that they support cryptocurrency. Once you are at the machine, you simply follow the instructions on the screen. It comes down to this:
- Adding your crypto wallet details via QR code or by entering its address
- Inserting cash you want to exchange for BTC after approving the offered rate
- Confirming the transaction and waiting for Bitcoin to appear in your wallet
Some ATMs also provide the option of selling Bitcoin, which makes them bidirectional. The process is similar — you enter the BTC sum from your wallet to swap for fiat money and receive cash or get the sum transferred to your account.
A huge majority of Bitcoin ATMs are in the USA and Canada. Their number has been decreasing lately, and our experts discuss if there’s a future for these machines. Let’s see what to expect in the coming years.
Bitcoin ATM Trends in Recent Years
The first crypto ATM became available in 2013 in Canada. It took about a year for the USA to accept this trend. The overall number of ATMs worldwide was gradually increasing and experienced a huge rise in 2018 and 2019. Two years later, the number of crypto automated teller machines broke the 30,000 milestone. Now, let’s check out what’s been happening during the last few years.
2022
According to Statista, you could access 34,770 Bitcoin ATMs in January and 39,548 machines in December 2022. That showed a 19.9% improvement compared to a year before. Although it wasn’t as a massive increase as in earlier years, it clearly showed signs that Bitcoin adoption was going well.
The crypto market was enjoying a good time, and ATM providers used that opportunity to offer more machines to purchase and sell Bitcoin for cash. It all seemed well, but the turbulent times in the crypto market were about to reflect on BTC ATMs, too.
2023
The pure statistics say that there were 38,040 crypto ATMs in January, but only 35,167 were still working in December 2023. That’s a drop of over 11%, and it occurred due to a combination of economic factors.
The crypto market was going through a crisis. The global economy wasn’t in the best shape either, with unemployment and inflation rates going up. All these affected the Bitcoin ATM market. Some smaller providers had to declare bankruptcy and close their machines for users.
2024
The year started in an encouraging way, and the estimation is that over 2,000 new crypto ATMs had appeared by April 2024. Bitcoin reached a new all-time high, and it seemed like it had secured a better future for ATMs and the crypto market overall.
However, the latest reports indicate that over 600 ATMs went offline in the first two months of the third quarter of 2024. July was a critical month since providers took off 435 machines, and 182 more went offline in August. Bitcoin ATM growth broke a 10-month streak when the number of machines declined in May 2024.
3 Reasons for Bitcoin ATM Number Drop
Bitcoin ATMs seem to be going through a rough patch, but what’s the reason behind that? Here are the three factors that have a critical influence on the number of these machines decreasing.
1. Regulatory Crackdowns
Illicit activities like money laundering and fraud have become a huge issue for Bitcoin ATMs. According to reports, individuals worldwide lost over $110 million in ATM-related scams. The primary targets are older citizens who might not have the best understanding of how Bitcoin and the crypto market work.
It’s not a surprise that authorities are looking to tighten regulations regarding Bitcoin ATMs. Although you need a license to operate a BTC ATM in the United States, there’s room to improve the legal framework. Some regulators suggest that these machines should be considered banks. According to the US Federal Trade Commission, fraudsters benefit from fast crypto transfers and increased anonymity.
You could notice regulatory issues throughout the world, too. The German government seized 13 ATMs and issued a warning that operators must honor KYC programs and €10,000 transaction limits. Singapore, on the other hand, completely banned crypto ATMs.
2. Decreased Profitability
The obvious reason why the number of Bitcoin ATMs went down is that there’s no need for such a large number of these machines. That is reflected in reports that many crypto ATMs have become unprofitable for operators. It’s always been a risky turf since cryptocurrencies are highly volatile and fluctuations in prices can lead to surprise losses.
Providers are also facing increased operational costs. That’s why they decided to deactivate their machines. It’s not regulatory or other issues, but a simple fact that they aren’t yielding sufficient returns.
3. Market Consolidation
Market consolidation goes hand in hand with decreased profitability. Smaller providers are dealing with liquidity issues, and that leads them to being acquired by large networks. RockItCoin has been obtaining smaller networks, with the goal of expanding its reach and streamlining operations. If we are considering the future of Bitcoin ATMs, the first ones in danger are minor operators. Large providers are still holding well, and the market might transform into having only several major players offering crypto ATMs.
Bitcoin ATM Trends: Continued Decline or Imminent Recovery?
If there’s a silver lining, it’s that the largest ATM operators record stable revenues despite the decline. Bitcoin Depot claims that its revenue doesn’t have much to do with BTC price. They claim that their machines serve for international remittances, money transfers, and online purchases. The fact these are non-speculatory purposes means that the company’s ATMs keep thriving even in turbulent times for BTC.
There’s no doubt that the Bitcoin ATM market won’t be completely closed anytime soon. It’s a big “if” whether we’ll see an increased number of machines or market consolidation will lead to a continued decline. Even if that happens, the numbers will only drop down to a sufficient level to serve crypto users, particularly those using these cash machines.
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