Crypto ATMs Lose Traction in Dulled Market

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

The first physical ATM has landed in a corner of Waves
WAVES
Café in Vancouver, Canada in October 2013. From this starting point, facilities have blossomed from Bitcoin
BTC
to include other currencies and allow users to deposit money in exchange for crypto.

Although the number of ATMs has reached 39,000 machines worldwide, an increase of 3,925% since 2017, installation rates have fallen since the start of the year. From January 2020 to January 2022, crypto ATM installations experienced a meteoric rise, more than fivefold to 34,388 machines worldwide. Yet since January this year, just 5,000 new machines have been installed, with a net 44 removed this month. The last time the net figure fell for a full month was in November 2015.

The slowdown in ATM installations follows the start of the bitcoin bear market. The price of the original crypto fell to $35,132 in January, after peaking at $67,599 in November. Bitcoin currently holds a market cap of $455 billion, up from a market cap of over $1 trillion in November 2021, according to CoinMarketCap.

“Customers are less active, so operators have less volume, so [they] don’t grow as fast and install as many ATMs,” says Patrick Mueller of Coin ATM Radar.

In July, ATM net growth was 572, low compared to the peak of 2,000 in 2021. “However, if you compare to the last bull cycle in 2017-2018, there was only about 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 crypto ATMs currently in operation, 95% are located in North America. The United States holds 87.9% of the global market share, by far the largest, followed by Canada at 6.3% and Spain at 0.6%. This lack of involvement from other jurisdictions could also explain the decline in the installation rate of crypto ATMs, as the most fertile markets are already saturated. The moves themselves could fuel the slowdown, reducing the convenience of nearby machines. Europe took down a network of 15 machines this year while the United States disabled 78.

Crypto ATMs do not work like typical cash machines, because they are rarely managed by financial institutions and are not connected to bank accounts. Instead, users deposit money which will be transferred in the form of cryptocurrency to a digital wallet via a QR code. Despite the integration of new cryptocurrencies, bitcoin continues to be the top asset with over 99% of crypto ATMs supporting it.

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