Bitcoin ATMs are expected to experience a surge in installations worldwide following the Bitcoin halving, a time when crypto FOMO (fear of missing out) typically reaches its peak, according to the CEO of a major Bitcoin ATM operator.
In 2023, the installation of crypto ATMs experienced its first annual decline in a decade, mainly due to a bear market that was further exacerbated by the collapse of several cryptocurrency firms.
However, Brandon Mintz, the CEO of Bitcoin Depot, states that 2024 has started off strong, with 1,469 crypto ATMs installed in just the first three months, compared to the over 3,000 that were removed by the same time in 2023, according to data from CoinATMRadar.
“It’s very encouraging to see that the industry continues to experience significant growth in the number of ATMs,” Mintz told Cointelegraph.
Mintz predicts a widespread recovery of the ATM industry, with Bitcoin (BTC) gaining momentum once again, having already surpassed its all-time high twice in March.
During previous bull markets, Mintz observed that crypto adoption surges later in the cycle, particularly during the FOMO period, which attracts more customers.
However, Mintz believes that it is still early in the cycle and points out that the halving event, scheduled for late April, is yet to occur. The halving event involves a 50% reduction in Bitcoin’s mining rewards.
“In the past, we’ve seen a greater uptick in activity after the halving,” he added. “The price tends to skyrocket the most after the halving, which triggers the FOMO phase.”
Although the number of ATMs has recently increased, Mintz claims that the number of ATM operators has declined over the past 18 months. One of the largest operators, Coin Cloud, which had 5,000 ATMs, filed for bankruptcy in February 2023.
“A lot more operators were struggling and went out of business than was publicly known,” Mintz revealed.
The decline in operators occurred rapidly after the collapse of the crypto exchange FTX in November 2022, which had a significant impact on the crypto market.
Bitcoin Depot’s financial results for the fourth quarter and full year of 2023, released on March 25, showed a 7% increase in annual revenues to $689 million, although net income dropped by 54% to $1.6 million.
The company has purchased 900 ATMs to be installed in the first quarter of 2024 and plans to launch 940 ATMs in convenience stores across 24 states in the United States.
According to CoinATMRadar, Bitcoin Depot is one of several operators in the Bitcoin ATM market. The second-largest operator, Coinflip, has just over 4,200 ATMs, while Bitstop is third with over 2,500.
Out of the 37,001 crypto ATMs worldwide, nearly 83% are located in the United States, with over 30,600, according to CoinATMRadar.
In January, the United States also approved spot Bitcoin exchange-traded funds (ETFs), which some believe will encourage institutional investors and retail traders to enter the Bitcoin market.
Mintz remains unfazed by the potential impact of ETFs on Bitcoin ATMs, stating that they cater to different customer bases. He explains that a large portion of Bitcoin Depot’s customer base primarily uses cash because they are either underbanked or unbanked, while Bitcoin ETF buyers tend to be high-income individuals with brokerage accounts.
Instead, Mintz believes that the rise in Bitcoin’s price driven by ETFs could lead to increased usage of ATMs as Bitcoin adoption continues to grow.
In conclusion, Bitcoin ATMs are expected to experience global growth in installations after the Bitcoin halving, with the CEO of Bitcoin Depot predicting a rebound in the industry. Despite the decline in the number of ATM operators, Bitcoin Depot has seen positive financial results and plans to continue expanding its ATM network. The approval of Bitcoin ETFs in the United States is unlikely to impact Bitcoin ATMs significantly, as they cater to different customer bases. However, the rise in Bitcoin’s price resulting from ETFs could lead to increased ATM usage as adoption increases.