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.
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.
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):
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.
There are many different bitcoin ATM providers on the market. If you plan to operate a bitcoin ATM, it is a hard choice which one to purchase.
On our site the full list of bitcoin ATM suppliers is available. It includes also the ones, which don’t even have a bitcoin ATM installed, however at least the prototype was provided to get listed.
You can also find many examples of bitcoin ATM profitability as well as bitcoin ATM profits calculator.
Beware of the scam!
As in many business areas closely related to Bitcoin, there are many scam players trying to cut easy money from new comers or the very risky people. As an example, the Moolah story can be used – the company notably known for Dogecoin support. Alex Green, who as it turned out, had several other names, was promising to deliver a bitcoin ATM to the market, which actually never happened. Finally, he disappeared with funds invested into the company and being at an exchange.
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.
BATMTwo Bitcoin 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)
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.
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.