Brandon Mintz, the CEO of Bitcoin ATM operator Bitcoin Depot, predicts a global surge in Bitcoin ATM installations following the Bitcoin halving. He anticipates increased demand for Bitcoin ATMs during the period after the halving when crypto FOMO typically intensifies. In 2023, there was a decline in crypto ATM installations for the first time in a decade, likely due to the bear market and collapse of some crypto firms. However, the beginning of 2024 has shown promising signs, with 1,469 crypto ATMs installed in the first three months alone, compared to over 3,000 removed during the same period in 2023.
Mintz expects the FOMO phase and increased adoption of cryptocurrencies to drive more customers to Bitcoin ATMs. Historically, the uptick in Bitcoin adoption and ATM usage tends to occur after the halving, leading to significant growth in the price of Bitcoin. Despite the recent increase in the number of teller machines, Mintz notes that the number of ATM operators has actually decreased over the past 18 months. The bankruptcy of major operator Coin Cloud, with 5,000 ATMs, was a significant casualty attributed to the collapse of crypto exchange FTX in November 2022.
Bitcoin Depot reported a 7% increase in revenues compared to the previous year in its fourth-quarter and full-year 2023 results. The company plans to install 900 teller machines in the first quarter of 2024 and an additional 940 ATMs in convenience stores across 24 states in the United States. Despite the approval of spot Bitcoin exchange-traded funds (ETFs) in the United States, Mintz believes this will not negatively impact Bitcoin ATMs. He views the ETF customer base as different from that of Bitcoin ATMs, with ATM users primarily transacting in cash, and suggests that increased adoption and price growth driven by ETFs could actually lead to more ATM usage as Bitcoin adoption continues to rise.
Bitcoin ATM scams are on the rise, resulting in unsuspecting users losing substantial sums of money. In 2023, major Bitcoin teller machine manufacturer General Bytes experienced a security breach that led to $1.5 million worth of BTC stolen from several of its operators. The hacker was able to upload their own Java application onto the company’s Bitcoin ATMs, allowing them to access funds on exchanges and hot wallets. In August 2022, General Bytes reported another hack that led to the theft of deposited Bitcoins at ATMs, resulting in around $16,000 stolen.
Overall, Mintz remains positive about the growth potential of the Bitcoin ATM industry, especially as the market recovers from the challenges faced in recent years. The upcoming Bitcoin halving event is expected to drive increased demand for Bitcoin ATMs, as crypto FOMO intensifies. With plans to install more ATMs across the United States, Bitcoin Depot is positioning itself for further growth and expansion in the evolving cryptocurrency market. However, the prevalence of Bitcoin ATM scams remains a concern, highlighting the importance of securing these machines and ensuring the safety of users’ funds. By addressing security vulnerabilities and continuing to innovate, the Bitcoin ATM industry can continue to thrive alongside the broader cryptocurrency ecosystem.
