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Bitcoin ATMs 101: What You Need To Know About This Growing Business Opportunity

Last Updated March 4, 2021 4:44 PM
Lester Coleman
Last Updated March 4, 2021 4:44 PM

Interested in becoming a bitcoin ATM operator? ATM Marketplace , an ATM industry resource, has released a 40-page guide on bitcoin ATMs that explores every aspect of the business opportunity. The report is titled, “Bitcoin ATMs 101: Opportunities for the IAD.” IAD stands for independent ATM deployment.

The guide, the first to examine the emerging cryptocurrency ATM market, notes bitcoin ATMs offer an efficient and secure way for people to buy and sell bitcoins. ATMs are an alternative to bitcoin exchanges that many believe are more susceptible to hacking and fraud. Bitcoin ATMs shoulder the credit, counterparty and volatility risk associated with bitcoin exchanges.

The guide includes an overview of bitcoin for readers who may be completely new to cryptocurrency.

Opportunity for Existing ATMs

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For existing ATM operators, bitcoin offers an opportunity to generate additional revenue streams at their ATMs. Operators of existing ATMs can install bitcoin software, allowing them to provide bitcoin in addition to traditional currency.

Those who opt for dedicated bitcoin ATMs must decide whether to provide the ability to buy and sell bitcoins or just bitcoin purchase capability.

Bitcoin ATM transaction fees are generally higher than traditional ATM transaction fees. The average transaction fee for buying and selling bitcoin at bitcoin ATMs is 6 percent.

In addition to charging transaction fees, some bitcoin ATM operators make money on the currency “float.” Because bitcoin prices vary among the different exchanges, bitcoin operators can sell bitcoin at a higher price than they pay for it.

As for income potential, the guide notes prime bitcoin ATM locations are reporting monthly transaction volumes ranging from $70,000 to $300,000. Successful operators have been covering the cost of their machines in three to nine months.

The guide also notes there are regulatory compliance requirements and remittance fees to consider. Operators need to weigh potential benefits against downsides, such as bitcoin price volatility and market uncertainties.

There is an overview of the current size of the bitcoin ATM market. As of March 2015, 356 bitcoin ATMs had been installed worldwide, according to Coin ATM Radar, including 119 in the U.S., 60 in Canada, 20 in Australia and 20 in the U.K.

Nearly two-thirds (61.8 percent) of bitcoin ATMs installed worldwide in March 2015 were one-way (selling bitcoin for cash) compared with 38.2 percent that were two-way (buying and selling bitcoin).

There is also an overview of the regulatory issues that bitcoin ATM operators must consider. In the U.S., banking and payment services are regulated at federal and state levels. One section addresses the recently published New York Department of Financial Services’ BitLicense. There is also a section on Canadian bitcoin ATM regulations.

Also read: Dollar wants to install 5500 bitcoin ATMs worldwide by 2016

Bitcoin ATM Manufacturer Overview

The guide summarizes ATMs from eight of the largest bitcoin ATM manufacturers: BitAccess, BitXatm.com, Coin Outlet, General Bytes, Genesis Coin, Lamassu, Robocoin and Skyhook. It also summarizes the different ID verification processes.

The guide can be downloaded for free by visiting the ATM Marketplace website.