Daniel Polotsky, CEO and Co-Founder of CoinFlip, shares his thoughts on Bitcoin ATMs and their importance, especially in regards to the unbanked and underbanked sector.
With over 8,000 machines globally, Bitcoin ATMs have become the go-to service for those in the cash-to-crypto market, which includes a significant
amount of the unbanked and underbanked. The surging demand from users who can’t or won’t use traditional onramps is propelling the industry through a period of hypergrowth.
Cryptocurrency and blockchain have produced countless industries to capitalize on the technology’s potential. While cryptocurrency is still mainly used as a speculative tool, fiat-to-crypto onramps have leveraged this interest to attract massive user bases.
Among the numerous onramp options, Bitcoin ATMs stands out. The fiat-to-crypto onramp industry is spearheaded by exchanges like Binance and Coinbase. Customers are able to purchase cryptocurrency with their bank accounts and debit/credit cards, and take advantage of numerous services, from derivative markets to educational programs.
Exchanges are some of the most powerful companies in the sector, but they also have a blind spot: they can’t serve customers who wish to pay in cash.
Bitcoin ATMs were created to fill this gap in the market. There is a growing group of individuals who wish to purchase cryptocurrency with cash, some of whom are the most vulnerable members of society. The cash-to-crypto market is hungry and Bitcoin ATM companies are working hard to install machines to meet the demand.
Looking back to move ahead
The first Bitcoin ATMs were clunky and often charged high fees. Instead of using Bitcoin ATMs, the cash-to-crypto market mainly transacted on P2P exchange sites like LocalBitcoins. However, in-person cash transactions were inconvenient and had the potential to be unsafe.
As Bitcoin ATMs became easier to use and available in more locations, the cash-to-crypto market migrated over. Bitcoin ATMs offered on-demand purchases, a simple customer experience, and a streamlined customer service process. As awareness and demand for cryptocurrency have skyrocketed over the last decade, the Bitcoin ATM industry’s growth has accelerated.
From 2015 to 2019, the number of ATMs worldwide has doubled or nearly doubled every single year. In 2019, the industry grew 54.8% with 2,248 ATMs placed. In the first five and a half months of 2020, another 1,935 ATMs were placed in 2020.
In 2017, an average of 91.6 ATMs were placed per month. In 2018, that number jumped to 169.8 ATMs per month. In 2019, an average of 187.3 ATMs were placed per month but 2020 has seen the Bitcoin ATM industry soar to new heights, with an average of 341.9 ATMs placed per month.
The U.S. has the most crypto ATMs by far, with 6,132 ATMs accounting for 74% of the global market. Europe has 1,158 ATMs, accounting for 14% of the global market and Canada has 740 ATMs, which is 8.9% of the global market.
Even if more and more individuals start adopting…