Will Crypto ATMs Follow the Market Cap or Chart a New Path?

Will Crypto ATMs Follow the Market Cap or Chart a New Path?

2017 was a boom year for bitcoin and other cryptocurrencies. The value of bitcoin went from $967.67 (in USD) at the beginning of the year to $13,844.70 at the end of the year. That’s an astronomical 1,431% growth in one year! Bitcoin became the 15th most valuable global liquid currency.

As cryptocurrencies value climbed, bitcoin ATMs mirrored the frenzy. People couldn’t buy bitcoin fast enough. And where there was a demand, the supply followed. Bitcoin ATMs allowed people to buy bitcoin with cash and place their purchase on a hard wallet in just a few clicks. The sky seemed to be the limit when it came to Crypto ATMs.

And then 2018 came. 2018 was supposed to be the year that bitcoin reached massive adoption and for altcoins to emerge and challenge bitcoin. Instead, 2018 has proven to be a year of rediscovery for all cryptocurrency assets. At the time of writing (July 10, 2018), bitcoin is clocking in at $6,803.50. The drop in price has tempered the enthusiasm about cryptocurrencies and bitcoin has fallen off the radar of mainstream media.

With the value and market cap of cryptocurrencies plummeting, you would expect the number of new crypto ATM installations to follow suit. However, that isn’t the case. They have continued to be installed and are being utilized now more than ever. See the graph below provided by Coin Codex.

 

There are several theories for why this phenomenon is taking place.

  1. Overbuying Supplies – This is the old game of predicting the market and ordering accordingly. It’s possible that many of the crypto ATM suppliers made bold predictions based on the increasing market and are installing the ATMs because they don’t want any lingering inventory. It’s also possible that the suppliers are of the mindset that the market will recover and want to be available for when mass adoption does take place.
  2. The Banking System – Surprisingly, crypto ATMs are being placed low-income neighborhoods. “People who use the machine most likely don’t have bank accounts,” Attisha, a convenient store manager, said. Attisha said he’s paid a rental fee to have the Bitcoin ATMs — run by Slon BTM — at his stores in Oak Park and an Exxon station in Wixom. Perhaps, people see bitcoin as a sustainable money holding account.

 

There are three ways the ATM market can go from here:

  1. Continue to Rise at the Same Rate – There are two plausible reasons for why we think crypto ATMs will continue to boom. First, people without bank accounts have started to use bitcoin as a money holding account. This offers a certain level of reassurance, albeit not strong, that the money will stay safe. Second, the largest crypto holding nations have gone untapped. Eastern Asia holds the majority of valuable cryptocurrencies and there are virtually no ATMs located in that region. With such a wide open market, there is a great potential for crypto ATMs to dot the globe.
  2. Continue to Rise but at a Slower Rate – The crypto frenzy is over. The value and enthusiasm has definitely simmered down. It seems plausible that the ATM market will stop growing at a exponential rate as well.
  3. Flat Line – If the ATM suppliers over purchased ATMs and want to match the market cap of the crypto market, expect the number of ATMs worldwide to flat line soon.