Bitcoin ATM Profitability Part 1 — Theoretical Calculations

According to the data available the average fee taken by the operators for using the Bitcoin ATM is 5.2%. This rate could be used as a starting point for calculation. Depending on the ATM provider, there potentially could be running (license) fees additionally to the one-time ATM purchase cost, like in the case of Robocoin the operator will have to pay 1% fee to the ATM provider (unless the life-time license is purchased for a lump-sum).

On this page you can find a Bitcoin ATM profit calculator for getting the feeling about return on investment. It is assumed that buy and sell operations are equal and are inputted in aggregate fields: the transactions number and average transaction size. Not all the Bitcoin ATMs support the two-way operations, so sometimes it is only buy operations, which the operator may take into forecast calculation. In fact, the buy and sell transations are different in characteristics. According to Robocoin statistics, 1/3 of all operations are sell Bitcoin transactions and 2/3 are buy operations on average. Also the average size of operations varies — average buy is about $480, while average sell is $750.

Using the calculator we’ve created 3 scenarios for different price-segment Bitcoin ATMs. In all scenarios we use 5% as Bitcoin ATM fee. In reality the operation metrics highly depend on many factors: location, traffic, country etc. and may be sufficiently different from the ones assumed for our scenarios.

Important! The theoretical calculations do not include any marketing or promotion costs. Also we have not included any legal licensing or paperwork costs, which could be quite considerable depending on the location (e.g. in US it may reach up to $50k). You may include these costs via the “Other” fields in the “Cost metrics” section (either one-time or running/monthly).

Scenario 1 — “Skyhook”

This is the cheapest available on the market and popular Bitcoin ATM with a price of the Bitcoin machine at $999. As it is one-way only and also the bill acceptor is limited in capacity (500 bills) — it makes it the cheapest ATM, but on the other hand it is limited in operations (e.g. large Euro banknotes are not accepted, which should be supported soon) and in locations choice (e.g. normally it should be placed in a secure space like shop or cafe, so the availability time is limited — no 24/7 normally).

For the calculation we assumed 100 transactions per month, average transaction of $50. Also it is assumed that no rent to be paid for the place and also the cash logistics are done by the operator.

Results show that the Bitcoin ATM payback period is only 4 months, and normally it will bring $235 to the owner as net cash flow every month after the return of investment:

Scenario 1 profit

According to the information from Skyhook owner in Arizona the average transaction size for his location is between $5-$20. After recalculating with average of $15 per transaction, we get payback period of 1 year and 2 months and the monthly net cash flow afterwards of only $70.5.

Scenario 1a profit

Scenario 2 — “Lamassu / BitAccess / General Bytes / BTC-O-MATIC / BTCPoint”

This scenario combines many different Bitcoin ATMs from the middle price interval. Some of them support two-way operations, some are not. But in general these bitcoin machines are more solid than from Scenario1. For the calculation the following assumptions were used: ATM cost is $6000 (close to current Lamassu pricing), monthly number of transactions — 100, and the average transaction size is assumed at $150. Still no rent and cash logistics are assumed.

Calculation shows that such a scenario reaches the break-even point in 9 months from the launch and after the investments return will bring monthly $705 to its owner.

Scenario 2 profit

Scenario 3 — “Robocoin / Genesis1”

Finally we reached the most expensive Bitcoin ATMs on the market, which look like the standard bank ATM. These Bitcoin machines are normally equipped with large capacity bill acceptors, support two-way operations and many different compliance features.

For the profitability calculation in this category we used: Bitcoin ATM cost is assumed at $15,000, 1% license fee has to be paid from all operations, number of transactions per month — 150 (there are additionally sell operations), average transaction size — $300 (sell operations are normally bigger than buy operations), location monthly rent — $200, cash logistics — $300 per month.

Calculation shows that the investment will be returned in 1 year and 1 month and then one unit will bring to the owner $1,165 of net cash flow monthly.

Scenario 3 profit

This scenario is taking into account the assumed average parameters for the Bitcoin ATM operation metrics, in particular cases the volume of transactions may be higher and the calculated return on investment is different. For example, the first Bitcoin ATM in Vancouver became profitable in less than a month period (see practical examples).

You can freely use the Bitcoin ATM profitability calculator and create your own calculation scenarios.

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