Crypto ATM Profitability Part 1 – Theoretical Calculations

Crypto ATM Profitability Part 1 – Theoretical Calculations

Disclaimer: The examples in this article are hypothetical. This article will make several predictions and assumptions. Therefore, you should not assume that the future performance of any specific crypto ATM will profitable or equal past performance levels.

According to a recent survey performed, the average fee operators place on crypto ATMs is 5.2%. We will use this fee as a starting point for calculating profitability. Depending on the ATM provider you choose there is a potential of running (license) fees in addition to the one-time ATM purchase/set-up cost. For example, Robocoin charges operators a 1% ATM provider fee (except when an upfront lifetime license is purchased).

An important distinction to make is whether a crypto ATM supports two-way operations or if it only has a buy operation. The buy and sell transaction are very different in characteristic and require a different prediction equation. According to Robocoin statistics, ⅓ of all operations are sell cryptocurrency transactions and the remaining ⅔ are buy operations. The buy and sell amounts vary greatly on several parameters but we will use the Robocoin averages again: the average buy is about $480 and the average sell amount is $750.

Using the calculator <<INSERT CALCULATOR PAGE LINK IF WE EVER CREATE ONE>> we’ve created follow one of the three scenarios for different price-segment crypto ATMs. In every scenario 5% as an ATM fee. In reality the operation metrics highly depend on a multiplicity of factors: location, traffic, country, affluence, etc. These factors may be sufficiently different from the ones we assumed in our scenarios.

It is important to note that these theoretical calculations do not include any costs related to marketing or promotions. The most successful crypto ATMs have put in effort to publicize the fact that they have set up a crypto ATM.

It is also important to note that these theoretical calculations do not include any legal licensing or paperwork costs. These costs could be quite considerable depending on the country of operation. You may include these costs in the “Other” Fields in the “Cost Metrics” section (either one-time or continual).

 

Scenario 1: Skyhook

The Skyhook ATM is the cheapest available option on the market coming in at $999. As it is one-way only and only accepts up to 500 bills – it makes it the cheapest ATM. It is also limited in operation (large Euro banknotes are not accepted but have been promised to be accepted soon) and because of the limited placement options (it does not come with a secure stand so must be placed in a shop or cafe).

For the calculation we made a conservative estimate of 100 transactions per month and an average of $50 per transaction. It is also presumed that no rent will need to be paid and that the cash logistics will all be done by the operator; however, this may not be the case.

Results show that the crypto ATM payback period is only 4 months, and normally it will bring in $235 to the owner as net cash flow every month as the return on investment.

According to the information from a Skyhook owner in Arizona, USA the average transaction size for his location is between $5-20. After recalculating an average of $15 per transactions the operators will break-even 14 months after installation and the operator will earn a monthly amount of $70.5 following the break-even point.

 

Scenario 2: Lamassu / BitAccess / General Bytes / BTC-O-MATIC / BTC Point

The scenario combines many different crypto ATMs since they are very similar in operation and fees. We will use the middle price interval to predict the ROI for these machines. In general, predictions for crypto machines are more stable than that of Scneario 1. For this calculation we will use the following assumptions: ATM cost: $6,000 (close to current Lamassu pricing) <<INSERT LAMASSU PAGE LINK>>, monthly amount of transactions: 100, average transaction size: $150. Note, this scenario still does not assume a rent of cash logistics cost.

Calculations show that such a scenario reaches the break-even point in 9 months from the time of installation and will bring in $705 to its owner.

 

Scenario 3: Robocoin / Genesis1

Scenario 3 focuses on the most expensive crypto ATMs on the market. These machines look like standard bank ATMs. These crypto machines are normally equipped with large capacity bill acceptors, support two-way operations, and many different compliance features.

For the profitability calculation in this category we used the following figures: crypto ATM cost: $15,000 (1% license fee has to be paid from all operations), number of transactions per month: 150 (this includes the additional sell operations), average transaction size: $300 (sell operations are normally larger than buy operations), location monthly rent: $200, cash logistics: $300 per month.

The calculation shows that the investment will be paid off in 13 months and once the break-even point is passed the owner will rake in $1,165 every month.

This scenario is taking into account the assumed average parameters for the crypto ATM operation metrics, in particular cases the volume of transactions may be higher and the calculated ROI is different. For example, the first crypto ATM in Vancouver became prfitable in less than a month.

We highly suggest that you read part 2 of this article: Crypto ATM Profitability Part 2 – Practical Examples <<INSERT PRACTICAL EXAMPLES PAGE LINK>>

You can use our crypto ATM profitability calculator <<INSERT CALCULATOR PAGE LINK>> to create your own calculation scenarios.