Bitcoin has been on a bull run in the past month, reaching new all-time highs above $35,000. However, this has not translated into more demand for Bitcoin ATMs, which allow users to buy and sell the cryptocurrency with cash.
According to data from Coin ATM Radar, the number of Bitcoin ATMs installed worldwide decreased by 0.9% in October, the biggest monthly drop in history. The total number of machines went down from 24,801 to 24,575, with 226 machines being removed.
The United States, which accounts for more than 80% of the global market, saw a 1.1% decline in installations, losing 202 machines. Canada, the second-largest market, also experienced a 0.8% decrease, with 19 machines removed.
The reasons for this slowdown are not clear, but some possible factors include:
- Regulatory uncertainty and compliance costs. Bitcoin ATMs are subject to different laws and regulations depending on the jurisdiction, which can pose challenges and expenses for operators. For example, in the U.S., some states require a money transmitter license, while others impose specific rules for crypto businesses.
- Competition from other platforms and services. Bitcoin ATMs are not the only way to buy and sell crypto with cash. Users can also use peer-to-peer platforms, such as Paxful and LocalBitcoins, or cash deposit services, such as LibertyX and BitQuick. These alternatives may offer lower fees, more convenience, and more privacy than Bitcoin ATMs.
- Market saturation and consolidation. The Bitcoin ATM industry has grown rapidly in the past few years, reaching over 24,000 machines in 2021. However, this growth may have reached a point of diminishing returns, as the demand for new machines may not match the supply. Additionally, the industry has seen some consolidation, with larger operators acquiring smaller ones, which could lead to fewer machines overall.
Despite the recent decline, the Bitcoin ATM industry is still growing year-over-year, with a 113% increase in installations since October 2020. Moreover, some countries, such as El Salvador, Nigeria, and Colombia, have seen a positive growth in October, indicating that there is still potential for expansion in emerging markets.