Crypto ATMs Lose Traction In Tarnished Market

Burgeoning growth of cryptocurrency ATMs gave a touch of tangibility to an all-digital market, but that expansion is decelerating as bitcoin and its rivals remain mired below last year’s highs.

The first physical automated teller machine landed on a corner at Waves
WAVES
Coffee in Vancouver, Canada, in October 2013. From that starting point, installations blossomed, expanding from Bitcoin
BTC
to include other currencies and allowing users to deposit cash in exchange for crypto.

Though ATM numbers have reached 39,000 machines worldwide, amounting to a 3,925% increase since 2017, installation rates have slumped since the start of the year. From January 2020 to January 2022, crypto ATM installations saw a meteoric rise, more than quintupling to 34,388 machines across the world. Yet since January of this year, barely 5,000 new machines have been installed, with a net of 44 being removed this month. The last time the net figure dropped for a full month was November 2015.

The slowdown in ATM installations follows the start of the bear market in bitcoin. The original crypto’s price decreased to $35,132 in January from a peak of $67,599 in November. Bitcoin currently holds a market cap of $455 billion, compared to a market cap of over $1 trillion in November of 2021, according to CoinMarketCap.

“The customers are less active, hence the operators get less volume, hence [they] don’t grow that fast and don’t install that many ATMs,” says Patrick Mueller of Coin ATM Radar.

In July, the net growth of ATMs was 572, low when compared to the peak 2,000 in 2021. “However if you compare to the last bull cycle in 2017-2018, there was only around 250 net growth per month. So in the current bear cycle, we are still 2x higher than the previous bull cycle,” adds Mueller.

Of the 39,000 current crypto ATMs in service, 95% are located in North America. The United States has 87.9% of the world’s market share, by far the most, followed by Canada at 6.3% and Spain at 0.6%. This lack of involvement from other jurisdictions could also account for the decreased crypto ATM installation rate, as the most fertile markets are already saturated. Removals themselves could feed the slowdown, reducing the convenience of nearby machines. Europe has removed a net of 15 machines this year while the United States has deactivated 78.

Crypto ATMs do not operate like typical cash machines, as they are rarely run by financial institutions and do not connect to bank accounts. Rather, users deposit cash that will be transferred as cryptocurrency to a digital wallet through a QR code. Despite the integration of new cryptocurrencies, bitcoin continues to be the leading asset with over 99% of crypto ATMs supporting it.

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