The Bitcoin ATM Market Could Hit $5.5 Billion by 2030
- The Bitcoin ATM space has experienced increased growth since the pandemic.
- About 30,000 Bitcoin ATMs have been set up globally over the last two years.
- Most crypto ATMs shut down due to a lack of compliance.
The Bitcoin ATM market has gotten competitive over the last 2 years and seems to have become a case of the survival of the fittest. Brandon Mintz, the founder, and CEO of Bitcoin Depot, the world’s biggest Bitcoin ATM provider, believes his firm is well-positioned to buy up other struggling companies. Speaking to CoinDesk, Mintz shared insight on the growth of the crypto ATM sector over the past two years.
Despite the competition of the crypto ATM space, Bitcoin Depot currently enjoys 20% of the market share. This means that 6,400 of the 40,000 Bitcoin ATMs globally belong to Bitcoin Depot. Interestingly, Mintz believes several smaller companies will be unable to survive the ongoing competition.
Mintz noted that the Bitcoin ATM space was growing steadily before COVID. However, that growth turned into an explosion after the pandemic. This growth, according to Mintz, could be traced to the ease of setting up a crypto ATM.
According to Mintz, “If you had everything in place to operate a Bitcoin ATM, you could put one on a busy street corner in a big city, and it was almost like a guarantee that you would do decent enough to be profitable.”
A second reason for the growth of the crypto ATM market is the growing demand for such services. Since the pandemic, most people have lost trust in financial institutions like banks, while others simply have no access to financial services.
Crypto ATMs are often used by underbanked or unbanked individuals or people with little or no access to financial services. These ATMs come in handy for people unable to buy cryptocurrency from platforms like Coinbase or Binance without access to regular banking accounts.
In addition, the process of using these ATMs is simple. Users simply need to have cash, some form of identification, and a phone. However, the process could differ based on location.
Analysts predict that the cryptocurrency ATM business could expand from $117 million to $5.5 billion by 2030. However, Mintz warns that the growing competition could eventually drive out smaller companies.
Mintz said to CoinDesk:
With the competition these days… you have to have a strong brand that is recognizable. A lot of the small operators have realized over the past year that it’s going to be very difficult to compete. A lot of them, anecdotally from conversations, are thinking about, ‘Should I try to compete, or should I get out and sell my portfolio to some larger company such as Bitcoin Depot?
Despite the growth of the crypto ATM market, there’s still a problem with the lack of quality. According to Mintz, most operators barely have a working website or a functional team. Others lack in areas such as compliance.
Interestingly, more than 3,600 ATMs were shut down in March this year. Regulators see some Bitcoin ATMs as a security threat and an easy way for criminals to launder stolen funds. Also, most operators fail to comply with local policies.
The UK has also prioritized fishing out these ATMs. In February, the UK’s Financial Conduct Authority (FCA) closed down about 27 crypto ATMs that it said operated illegally. The NCA has yet to license any crypto ATM in the UK.
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