After experiencing the downfall in March, this April Bitcoin prices went in a different direction. They started to rise steadily from the beginning of the month, starting at $6,794 and peaking at $9,556 on 24. April ended with a value of $9,260, which comes to a 36% rise since beginning of the month.
Accompanying the upward price trajectory was the growth in the number of new machines.
Period Start: 2667, Period End: 2878 Opened: 250, Closed: 39, Net Growth:+211(+7.9%)
Unlike the prices that fluctuate since the year started, the number of new machines continues to follow a steady increase. That trend continues in April.
Bitcoin ATM industry is relatively new, however, it develops very dynamically. There are many new players entering the market, at the same time there is definitely a trend of some major participants increasing their machine networks size. In this article we evaluate how high is the concentration in bitcoin ATM industry w.r.t. manufacturers and operators. For assessment we look at top 3 countries with highest number of bitcoin ATMs installed: United States of America, Canada and United Kingdom.
For the purpose of this article three types of indexes are used:
Concentration ratio 3 (CR3) – market share controlled by top 3 manufacturers or operators;
Concentration ratio 5 (CR5) – market share controlled by top 5 manufacturers or operators;
Herfindahl index – is a concentration index, which is calculated as a sum of squared market shares, and gives more weight to the situation with dominance of a single or small group of companies.
International money transfer market – best fit for Bitcoin
Remittance market is a huge transfer of money happening every day. According to World Bank report the estimated remittances size in 2015 was forecast to be $601 billion. International transfers were one of the best-fitting envisioned applications of bitcoin, as it is state border-less by definition and cheap to send money irrespective of amounts sent, while only fees per transaction size in bytes matter. However, it is still a hard way to get Bitcoin adapted at a massive scale. Early stage of its development makes it an instrument for tech advanced people only.
With introduction of new bitcoin services we are moving closer to the case when bitcoin is used daily by many households, bitcoin ATM is one of such services. Initial idea of bitcoin machines is to exchange cash to bitcoins or other cyrptocurrencies and vice versa, bitcoin to cash. However, there are other use-cases for bitcoin ATMs evolved. One of them is international remittance.
Bitcoin ATMs are spreading quite fast since the end of 2015 and beginning of 2016. Although the most useful application of bitcoin machines could be in the developing countries where financial inclusion is low, the majority of bitcoin ATMs are still appearing in developed countries.
Quick look at bitcoin ATM aggregated stats shows that 63% of all bitcoin machines are in North America and 25% are in Europe. Taking into account 5% in Oceania (mostly Australia) means almost 95% of all machines are in developed countries. There are several reasons for this. Costs for bitcoin ATMs might be quite high for average businessmen in developing country with respect to risk of operating and running it. Also return on investment required can be achieved only in locations with relatively large user base and steady bitcoin usage (mostly in developed countries as of now), which results in transaction volume for such machines.
Leading country within the developed countries list with respect to bitcoin ATM adoption is the United States. As of the end of March 2016 it has roughly 280 bitcoin ATMs installed across the country, which comprises ~45% of all installations worldwide.
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.
Sometimes it is hard to find a good location for a bitcoin ATM, but at the same time there are places where demand is high enough to put several machines at the same location or close to each other. It might be dictated by high competition in the region among the operators or simply pure high demand for buy / sell bitcoin services.
In this post we look at the list of top 6 bitcoin ATM cities and check who are the top operators in the areas and what is the mostly used type of bitcoin ATMs.
#6 Chicago, USA – 12 bitcoin ATMs
Chicago opens our list of top bitcoin ATM cities at position #6 with 12 installations. 7 machines are manufacturer by Genesis Coin, who is a leading supplier of bitcoin machines in this area. Speaking about operators, half of all installations belong to Red Leaf Chicago, who is the leading provider of bitcoin ATM services in Chicago area.
Bitcoin ATMs appeared first in 2013 and since then increased their presence in many countries around the world. At the moment there are 341 bitcoin ATM installed according to our bitcoin machines map.
Bitcoin ATM is one of the fastest ways to get into bitcoins and sell bitcoins for cash in case it supports two-way operations. But in parallel there are many more physical locations, where you can buy bitcoins for cash or sometimes sell. Those services are usually based on the existing infrastructure be it ATMs network, stores chain or agent offices. Here is a list of such services, usually every of them is targeting some geographical local market. Continue reading →