Category Archives: Profitability

Bitcoin Depot ATM

Bitcoin ATM Questions 2020 Q&A with Adam from BC Systems

In this video, you will hear Adam from BC Systems responding to viewer questions. Below we listed some of the questions and answers for you, so you can check it out easily.

  • Can you do a video about approaching locations for your machines? Also how much money can you keep in your machines both the Bitcoin and cash?

Adam explained how first you will need to approach the business owner of the location, which can sometimes be tricky since they often aren’t available directly on the location. Especially if they own multiple stores. This is if you are doing the groundwork yourself and you don’t want any additional cost.

If you don’t have time to go around looking for locations, there are guys called the “Locators” whose job is to go to different locations and put your machine in various stores. They charge a small fee, usually around 150-300 dollars depending on the location.

As for the amount of money and Bitcoin kept in the machines, Adam explained that it really depends on how your machines are running. You need to monitor them every day to check on the number of transactions and decide the amount of Bitcoin to cover their needs. You also need to monitor the trends, because you definitely don’t want to buy too much Bitcoin when the price is going down, or fluctuating too much.

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Bitcoin ATM Operators Growth and Survival Statistics

Public opinion about bitcoin ATM business varies, but mostly it is split into two radical sides: either “machines are not used by anyone and hence operators don’t make any money”, or “the fees charged are usually so huge, probably operators do a lot of money”. Obviously, both extremes do not correspond to reality, as if it was not profitable, there would be not that many businesses doing this long term, on the other hand, the fee size is dictated by market and there are plenty of various costs and risks associated with this business.

In this post we analyze historical data available on the website about operators growth and closure of activities. We analyze activity of total 870 operators on the website, since October 2013, when the first publicly accessible ATM was installed, and up to the end of January 2020.

Number of crypto ATMs by operator
Number of ATMs per each operator over time

The chart above summarizes information, that is used as a source for analysis — number of ATMs installed by each operator on the 1st day of each calendar month.

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Bitcoin ATM’s Profits and Cost Breakdown

In this video, you will hear Adam from BC Systems talking about what profits you can expect, as well as the cost options and operating your very own Bitcoin ATM Company.

He divided his presentation into four parts: Location, Cost, Marketing and Fees.

Location

Location is probably the most important part of the planning and operating your Bitcoin ATM Company. Of course, there are different variables when it comes to choosing a location like foot traffic, competition, and potential fees. In his experience shopping malls are the most successful locations for a couple of reasons.

First of all their working hours. They are usually open from 8 A.M. to 9 P.M. and they also tend to work on holidays, so the overall availability of the machines is going to be excellent.

Secondly, shopping malls present a safe place for people. When they go to a public place, where there is a lot of crowd, they feel like they are going somewhere reputable and feel much safer than going to let’s say a liquor store or a smoke shop where there aren’t usually a lot of other people around. This is especially true for guys who are making large transactions, they always want to feel safe and comfortable carrying their money.

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Revenue and costs of running a bitcoin ATM

Bitcoin ATM industry is growing fast. There are several new bitcoin machine installations worldwide daily. Existing bitcoin ATM operators increase number of machines in their networks, as well as new operators join the market. Even on the production side, there are new manufacturers developing their products and coming to the market with new bitcoin machine models targeting different segments and niches, e.g. recently were added BitTeller, Bitlox, BitConcept on our site.

Running a bitcoin ATM is an interesting business opportunity in the new era of digital currencies, however, sometimes the lack of information keeps people away as they don’t know where to start, or get any practical estimations of how much you can earn with a bitcoin ATM. In order to increase transparency Coin ATM Radar conducted a survey with a number of bitcoin ATM operators to find out what are current metrics of an average bitcoin ATM business.

Revenue and costs of bitcoin ATM

Before going any deeper we recommend to read:

Now back to survey. It was sent to 24 operators in total, 11 responded either in full or skipping some questions due to not wanting sharing info, although it was mentioned that none of info will be associated in any form to the company or person responding. Even limited info we received gives a good estimation of level of costs and earnings one should expect.

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Risks of running a bitcoin ATM business

Running a bitcoin ATM brings a lot of opportunities. On the other side such a business brings a lot of risks too.

This post concentrates on two of the main risks which bitcoin ATM operators have to deal with and choose which way to follow:

  • Exchange rate risk;
  • Counterparty risk.

For simplicity reasons lets look at the case when bitcoin ATM allows buying bitcoins for cash, not selling. Every bitcoin ATM operator chooses how to run a bitcoin machine in this case:

  • By using own bitcoin stock;
  • Through exchange mirroring deals.

Selling bitcoins from own stock

This scenario is illustrated on the following diagram (click to enlarge):

Operating bitcoin ATM from own stock bitcoins

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Bitcoin ATMs industry overview after 2 years since first launch

It’s been two years since the first bitcoin ATM went live in Vancouver, Canada on 29th October 2013. So what has been achieved over this time and what are the current dynamics of this newly evolving market?

As it is seen on the following chart number of bitcoin ATMs is steadily increasing. However, the speed is lower compared to the first year. During the first year there were 284 bitcoin ATMs installed and in the second year only 187 new bitcoin ATM locations were added and not removed later. This is lower than we forecasted a year ago based on the growth rate of traditional bank ATMs in the beginning of 70-s. It was calculated that there will be about 562 bitcoin ATMs installed by this time, however, there are only 471 in the world.

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General Bytes Bitcoin ATM review

In the previous article we provided a review of Genesis Coin Bitcoin ATMs. In this post we review another bitcoin ATM more compact one from a Czech company General Bytes.

Overview

BATMTwo Bitcoin ATM

General Bytes ATM

  • One-Way Bitcoin ATM
  • Price 2849 USD, Free shipping
  • Sells coins from wallet or exchange
  • Point of Sale integrated
  • Remotely manageable and upgradable
  • Multilingual (English, Česky, Deutsch, Español, Français, Hrvatski, Italiano, Nederlands, Polski, Pусский, Slovenčina, 中国的)
  • Fiat Multicurrency (more than 120 including USD, EUR, etc)
  • Crypto Multicurrency (Bitcoin, Litecoin, Dogecoin)
  • AML/KYC integrated (Fingerprint or SMS)

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Bitcoin ATM Profitability Part 2 — Real Examples

In the previous post we discussed the theoretical profit calculations for running a Bitcoin ATM. This post collects the real-life examples of operation metrics for different Bitcoin ATMs found in the internet.

Vancouver first Robocoin machine

Due to a lot of attention as the first Bitcoin ATM and also due to the high demand for bitcoins during the ATM launch, this machine did CAD 100,000 (~$95,000) in 348 transactions during the first eight days ($273 per transaction) (source). Later it was announced that Bitcoin ATM did roughly 1 million CAD (~$950,000) in transactions during the first 29 days with 1,576 buy and sell transactions ($603 per transaction).

The investment was paid back during the period less than a month in this case.

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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.

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