Bitcoin Depot CEO expects crypto ATMs to grow in popularity as a result of halving and the launch of BTC ETFs

What’s new? After another Bitcoin network halving, the number of crypto ATMs will increase dramatically globally, as historically during this period, the fear of lost profits (FOMO) among crypto traders reaches a peak. This statement was made by Brandon Mintz, the CEO of bitcoin ATM operator Bitcoin Depot. In 2023, the number of crypto ATM installations declined year-over-year for the first time in a decade amid the bear market.

Cointelegraph’s material

Halving is code’s embedded cut in half of the reward to miners for a mined block on the blockchain, which occurs approximately every four years. Initially, miners received 50 BTC; on November 28, 2012, the number dropped to 25 BTC, on July 9, 2016, to 12,5 BTC, and on May 11, 2020, to 6,25 BTC. In April 2024, the award will be cut to 3,125 BTC.

What else is known? According to Mintz, 2024 has started off extremely well, with 1469 crypto ATMs installed in the first three months. In comparison, over 3000 devices were removed during the same period last year.

Although the number of crypto ATMs has recently increased, Mintz says that the number of operators has decreased over the past 18 months. One of the largest was Coin Cloud with 5000 crypto ATMs, but it went bankrupt in February 2023. “A lot more of them were struggling and went out of business than was shown publicly,” he added, explaining that the sharp decline began after the bankruptcy of crypto exchange FTX in November 2022, which took the entire crypto market with it.

In terms of predictions for the industry, Mintz, citing historical data, notes that there has previously been a sharp spike in the price of BTC after halving, followed by a FOMO phase. It is during this period that interest in cryptocurrencies increases and more new users enter the market. “The adoption rate is really helpful because if more people are buying Bitcoin, then a portion of those are likely going to Bitcoin ATMs,” the senior executive explained.

Bitcoin Depot’s own net profit for 2023 dropped by 54% to $1,6 million. That said, the company purchased 900 crypto ATMs for installation in Q1 of this year and plans to place 940 devices in convenience stores in 24 US states. The company has a total of 7377 devices and has a 19,9% market share, according to CoinATMRadar.

Mintz also believes that issuers of spot bitcoin exchange-traded funds (ETFs) are not competitors to crypto operators, as such products have a different client base. Bitcoin funds have amassed $35 billion in assets under management since they began trading in the US on January 11. They allow access to the asset through the purchase of shares.

Mintz clarified that the vast majority of his company’s clients transact in cash because they do not have sufficient access to banking services. “[The] vast majority of all of our customers make less than $90 000 to $100 000 a year, so our customer base is not that likely to have a brokerage account or a broker and has not been likely to have just been sitting on the sidelines waiting for [an ETF] when it’s so easy to just buy through a Bitcoin ATM,” Mintz said.

In his opinion, ETFs are driving the price of bitcoin up, leading to an increase in its adoption and, as a result, an increase in the popularity of using cryptocurrencies.