Several bitcoin ATM companies around the world report that the market in that sector of the crypto industry is alive and booming, thanks to rapid adoption of the service in Latin America.
According to Matias Goldenhörn, who heads Athena Bitcoin’s Latin America operations, bitcoin ATMs are quickly gaining traction for a growing number of users.
The sentiment is supported by data from tracking site Coin ATM Radar, which puts the total number of cryptocurrency ATMs in the world at approximately 4,213.
Most of these devices offer Bitcoin-only services, which is a big leap from just 471 devices deployed worldwide in early 2015.
Huge demand is driven by inflation
Coin ATM Radar shows that most of the bitcoin teller machines are deployed in North America. However, demand in the Latin America region is on the upward, mostly due to the tough economic times that hit the region in 2018.
Athena Bitcoin reportedly earned over $3 million in profits last year after the firm installed 25 new ATMs in Latin America. And the company is eyeing a $7 million Series A funding round that it says will help it install 150 new bitcoin machines in the region in 2019.
Jorge Farias, the CEO of Cryptobuyer in Panama, believes the demand will remain strong in 2019 as it was in 2018 despite the slump in crypto prices.
While most machines are installed in Walmart Superstores, e-commerce giant MercadoLibre could provide most of these locations as it has stores in Argentina, Colombia, Venezuela among other countries in the region.
The store has branches in multiple locations across Latin America, with customers allowed to deposit cash and earn credit that can then be transferred to cryptocurrency wallets.
Farias’ Cryptobuyer reportedly wants to install 30 ATMs in the region, with ten devices in Argentina, Mexico and in Venezuela.
Support for more tokens
Growth has however seen demand for machines that support several other cryptocurrencies, which is what has seen the rise in demand for ATMs in Venezuela where Dash is widely used.
The co-founder of ATM retailer BitAcces Moe Adham says that multi-asset machines are becoming popular because they enable users to access near-instant liquidity with digital assets that are traditionally difficult to convert.
BitAccess is thus looking to roll out support for up to 70 tokens, which could see its users across the world gain more access to crypto usage. The firm currently has 242 machines, most of them in North America and Europe, and four in Vietnam.
At the moment, the company has seen increasing demand for altcoins like Ethereum (ETH), Litecoin (LTC), and Tron (TRX), with last year providing the first indication that crypto ATM usage had actually begun to decouple from volatility in the bitcoin market.
Speaking to Coindesk, the firm’s co-founder Adham said that demand has been steady since July last year, adding that as bitcoin’s price decreased, demand rose “month over month.”
Switzerland-based Lamassu has hundreds of machines that offer support to ETH, BCH, ZEC, LTC, and DASH.
More and more crypto holders are using bitcoin ATMs, finding them convenient to convert cash as well as transact across borders. However, the ecosystem still faces that big question of what happens next on the regulatory front.
This is because the regulatory landscape remains mostly opaque and presents newer hurdles every other day.
The lack of clarity from regulators has seen several bitcoin ATM firms suspend launching of services in some regions.
Last year, Indian police arrested officials of the Unocoin exchange after the startup launched a multi-asset crypto ATM in the city of Bangalore. In Russia, police seized 22 bitcoin ATMs belonging to BBFpro following orders from the country’s central bank.
There are also challenges with regard to tokens, as some cryptocurrencies could be deemed as unregistered securities.
Some within the sector say that “securitization” poses the biggest challenge, although many prefer to comply with regulatory demands as set out in each jurisdiction they seek to operate.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.