Finance

Crypto ATMs to resurge once Bitcoin ‘FOMO’ hits full swing, says CEO

Bitcoin ATMs will likely see a global acceleration in installations after the Bitcoin halving, a period when crypto FOMO (fear of missing out) typically hits a fever pitch, according to the boss of a major Bitcoin ATM operator.

In 2023, crypto ATM installs had their first-ever yearly decline in a decade, owing to a bear market likely exacerbated by the collapse of several crypto firms.

However, Bitcoin Depot CEO Brandon Mintz notes that 2024 has already started with a bang, with 1,469 crypto ATMs installed in just the first three months, compared to the over 3,000 removed by around the same time in 2023, according to data from CoinATMRadar.

“It’s looking really positive that the industry continues to see a lot of growth in kiosk count,” Bitcoin Depot CEO Brandon Mintz told Cointelegraph.

Over 400 ATMs have been installed between March 1 and March 27. Source: CoinATMRadar

Mintz is now tipping an industry-wide ATM rebound with Bitcoin (BTC) back in swing, which has already twice beaten its all-time high in March.

In past bull markets, Mintz noted that “later in the cycle, especially that period of FOMO that starts happening,” is when crypto adoption surges and, with it, brings more customers.

“The adoption rate is really helpful because if more people are buying Bitcoin, then a portion of those are likely going to Bitcoin ATMs.”

That, however, typically comes later in the cycle and “it’s still pretty early,” according to Mintz.

“We aren’t even at the halving yet,” he said, mentioning the event slated for late April when Bitcoin’s mining rewards are cut 50%.

“In the past, more of the uptick we’ve seen has been after the halving,” he added. “After the halving is when the price skyrockets the most, and that’s when the FOMO phase starts.”

While the ATM count has recently climbed, Mintz claims over the past 18 months, the number of ATM operators has dropped. One of the largest was the 5,000 ATM-strong operator Coin Cloud, which went bankrupt in February 2023.

“A lot more of them were struggling and went out of business than was shown publicly,” he said.

The drop “happened pretty quickly” after crypto exchange FTX collapsed in November 2022 and took the crypto market with it, he added.

Bitcoin Depot’s fourth quarter and full 2023 results released on March 25 saw full-year revenues up 7% year-on-year to $689 million, though net income dropped 54% to $1.6 million.

It also bought 900 ATMs to install in the first quarter of 2024 and has plans for 940 ATMs to go live in convenience stores in 24 United States states.

According to CoinATMRadar, the Bitcoin ATM operator shares the market with a small number of other operators. The runner-up rival operator Coinflip has just over half that with over 4,200, while Bitstop is third with over 2,500.

Spot Bitcoin ETFs are no bother

Of the 37,001 crypto ATMs in the world, the United States is home to nearly 83% of them, with over 30,600, per CoinATMRadar.

In January, the U.S. also approved spot Bitcoin exchange-traded funds (ETFs), which some have hailed as an adoption catalyst for institutions and retail punters looking to get into Bitcoin.

Mintz was unshaken by what impact the ETFs could have on Bitcoin ATMs. “We view it as a totally different customer base,” he said.

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“A large portion of our customer base transacts primarily in cash or only in cash because they’re underbanked or unbanked,” he added.

On the other hand, Bitcoin ETF buyers are “more high-income individuals with brokerages and brokers.”

“[The] vast majority of all of our customers make less than $90,000 to $100,000 a year, so our customer base is not that likely to have a brokerage account or a broker and has not been likely to have just been sitting on the sidelines waiting for [an ETF] when it’s so easy to just buy through a Bitcoin ATM,” Mintz said.

Instead, he thinks the ETFs driving Bitcoin’s price higher could mean more ATM usage as Bitcoin adoption climbs.

“If adoption increases, we think it likely translates to increased usage of Bitcoin ATMs. So in the grand scheme of things, I think it is way more helpful to us in our industry than it is in terms of impacting us in a negative way.”

Big Questions: How can Bitcoin payments stage a comeback?