Bitcoin ATMs Expand Despite Shelter-in-Place Rules

Tucked into corners of grocery accumulations, gas stations and transit hubs, crypto ATMs are part of the “critical infrastructure industry” still allowed to operate among the coronavirus contagion event. And some are thriving.

With blockchain-based payments apps and entertainment platforms seeing a in addition in users with people spending more time online, crypto and bitcoin ATMs, the physical manifestation of this network, appearance of an unlikely adjunct to this market growth.

Despite wide-reaching shelter-in-place rulings meant to keep people indoors, some bitcoin ATM big-shots are reporting an increase in transactions, while others are taking advantage of this intermission to expand their networks. 

As the case may be people are scared and are prepping in the most immediate way: the nearest ATM. Bitcoin-related Google searches are skyrocketing, but for the many intimidated by the exceptional of wallets, private keys and QR codes, bitcoin ATMs (sometimes called BTMs) provide a convenient onramp to these “secure haven” assets. 

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“Even during a universal pandemic, and perhaps more so, Bitcoin and Bitcoin point-of-sale services meet our customers’ essential needs in participating in this next-generation of banking, settlement, and e-commerce,” Marc Grens, co-founder of DigitalMint, a Bitcoin ATM operator, said over email. 

Approximately 95 percent of DigitalMint automobiles are located in or outside of essential businesses and still accessible to the public. While the firm has seen a “slight decline” in all-embracing volumes, Grens said, “we’re still driving a consistent amount of new and existing customer traffic, even during the lockdown.” 

Since Cortege, DigitalMint has expanded its kiosk and teller services to a few dozen new locations in Boston, Los Angeles and Philadelphia. According to Coin ATM Radar, the reckon number of ATMs has increased 5.6 percent to 7,417 machines on April 1, up from 7,023 on March 1.

Similarly, LibertyX, which was awarded a “BitLicense” to operate in New York last year, has finally begun to expand to locations in the state. “We’ve gone from zero to divers hundred ATMs in a little over a month,” CEO & co-founder Chris Yim, said. Including expansions across the country, LibertyX has augmented approximately 1,000 new machines in the last two months.

LibertyX doesn’t own the existent physical machines, but licenses software to non-bank ATMs manufactured by Genmega and Hyosung, or operated by Payment Alliance Worldwide, which in turn are maintained by private owners across the country. At some point LibertyX’s software will be established by default in new machines, but for now, ATM operators have to manually update their software to support crypto transactions. 

“Timing-wise, it’s a not much unfortunate,” Yim said. But, under quarantine, “I don’t think these operators have much else to do.” 

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Transaction volume across LibertyX’s 3,000 ATM network dropped approximately 20 percent in March. “We’re almost isolated to where we were pre-COVID.” Yim added: “April 15 was one of our highest volume ATM days, the day many taxpayers received their stimulus slow.”

The company has also seen an increase in customer support tickets asking how the product works, suggesting an uptick in stake among new users. 

Unlike LibertyX and DigitalMint, a recent market entrant is reporting a surge in transaction volume, notwithstanding the shrinking footprint of its ATM network. Coinsquare, which bought a controlling stake in crypto ATM startup Just Cash last summer, rumoured about 350 of its 800 total ATMs are currently inaccessible. 

According to CEO Cole Diamond, the average transaction size in the past seven days is up 167 percent compared to the usually transaction in 2019. While the average transaction size for the entire month is up 158 percent on last year’s regular. 

“These numbers are staggering. Fewer machines, more overall transactions, and far more value per transaction,” Diamond mentioned. “The average number, and average volume of transactions, is the highest it’s ever been.”

Coinsquare operates a similar business exemplar to LibertyX, providing software to non-bank ATMs to enable crypto transactions. He expects to roll out to several thousand new big-time operators in the coming months. 

Brick-and-mortar banks are modifying or curtailing in-person uses, like all businesses trying to adhere to social distancing mandates. Some retail branches have cordoned off access to ATMs, while others are modifying to “drive-through only.” 

This is a level of control many Bitcoin ATM manufacturers are unable to exert. As providers of software, or visitors that franchisee machines to private owners, it’s up to operators to determine how, if they choose to, sanitize these screens. 

Grens, Yim and Diamond hold reached out to machine operators to recommend best practices in disinfection. But there really isn’t much they can do.

“It’s not responsible for us to light out people to go out and touch screens,” Yim said. His firm, like the others, has low variable costs, little overhead, and nearly righteous profits when times are fat, and said there’s runway for the company to wait out the COVID-19 crisis. 

“Although the country may be fasten down, our lives and financial responsibilities cannot be put on hold,” Grens said. “Fortunately for our customers, Bitcoin never go through a revolves on hold, either.”