Bitcoin storage efforts follow surging ATM industry

adminApril 16, 2024

Some major players in the industry, such as Bitcoin (BTC) ATM operator Bitcoin Depot, have remained undeterred despite the high volatility in cryptocurrency prices. Bitcoin Depot said in its 10-K report filed on April 15 that the largest U.S. ATM operator has historically had no correlation with its revenue and Bitcoin price.

Bitcoin Storage Efforts to Mitigate Volatility

The company’s revenue in 2023 was $689 million, compared to $647 million in 2022. According to the company, these returns are not tied to the price of Bitcoin despite market volatility.

According to ATM operators, the lack of correlation between revenue and Bitcoin price stems from the nature of the services provided. The company said its user surveys show that the majority of users use its products and services for non-speculative purposes, including money transfers, international transfers and online purchases.

ATM industry dominance

Bitcoin Depot has also sought to reduce its exposure to BTC price volatility by maintaining relatively low Bitcoin balances (less than $800,000) at any given time.

“Our normal practice is to purchase Bitcoin through a liquidity provider such as Cumberland DRW or Abra. We only replenish Bitcoin through purchases from major Bitcoin liquidity providers and are not directly involved in Bitcoin mining.”

Bitcoin Depot highlighted two key components of the working capital required for its operations: Bitcoin in hot wallets to process customer orders and cash flow from Bitcoin ATM kiosks. By December 31, 2023, cash from BTM kiosks accounted for approximately 21% of Bitcoin Depot’s monthly revenue.

Founded in 2016, Bitcoin Depot has the largest Bitcoin ATM network in the world. Bitcoin ATMs, also known as BTMs, allow users to deposit and withdraw cash or money using their debit cards. As of April 2024, Bitcoin Depot is the world’s largest cryptocurrency ATM operator, operating more than 7,000 BTMs, according to data from CoinATMRadar. Bitcoin Depot’s rival CoinFlip has a total of 4,800 machines, while BitStop has 2,500 machines.

Bitcoin Depot CEO Brandon Mintz said this week’s scheduled Bitcoin halving event is expected to result in a significant resurgence within the ATM industry.