What is a Bitcoin ATM?
Bitcoin ATMs are one of the most convenient ways to transfer physical cash into Bitcoin (or other cryptocurrencies).
The idea is simple: Walk up to a Bitcoin ATM, insert cash, receive cryptocurrency.
The popularity of Bitcoin ATMs, also known as BTMs, has grown particularly fast in countries with volatile financial markets like Venezuela where citizens like quick access to global digital assets like Bitcoin. Citizens in these countries are interested in quickly offloading their country’s currency for a digital asset that is not tied to or regulated by any government.
Bitcoin ATMs are the perfect solution.
This is especially true in countries where banking systems have preventative measures to stop account holders from purchasing crypto through their bank account.
The idea of owning Bitcoin ATMs has recently become increasingly popular among entrepreneurs looking to tap into a rapidly growing sector of an emerging market.
But, Bitcoin ATM ownership isn’t super clear cut and there are certainly some important things to keep in mind before diving in. Here, we’ve broken down everything you need to know to start a Bitcoin ATM business.
Getting Started with Your Own Bitcoin ATM
If you’re looking to get started in the Bitcoin ATM industry and start your own network of BTMs, here are the top tips you should follow to be sure your Bitcoin ATM business plan is on point:
Consult with an Attorney & Market Advisor
The legality of Bitcoin ATMs differs greatly by jurisdiction. Before diving into the BTM world It is advised you contact an attorney.
Understanding the law will help prevent stress, confusing, and potentially costly legal ramifications.
Insurance & Tech Support
Because BTMs are a relatively new business, there isn’t always a ton of available resources available when it comes time to troubleshoot your machine.
Some BTM companies provide limited warranty & equipment insurance. In some cases, they even provide local tech support.
Find a Bank, Exchange, or Mining Pool to Link to Your BTM
The actual funding aspect of a Bitcoin ATM network can come from a few places: A bank, an exchange, or a mining pool.
Ideally, BTM owners should be able to link a bank account to their machine.
Although this is not available in all jurisdictions or by all banks, this seamless process allows funds to be wired to exchange as the cycle repeats and machines need to be replenished.
Here is a list of popular banks broken down by the level of friendliness to Bitcoin ATM owners.
|Bank of the West||X|
|Community Banks of Colorado||X|
|Cross River Bank||X||Banks bitcoin businesses and exchanges. Will not bank ATM operators.|
|Erie Federal Credit Union||X|
|First National Bank||X|
|Huntington Bank||X||Banks MSBs, but will not bank bitcoin-related businesses.|
|Marquette Savings Bank||X|
|Metropolitan Commercial Bank||X||Banks Coinbase. Won’t open accounts for business assets under 2 million dollars.|
|Silvergate Bank||X||Banks ATMs & Exchanges. Need to be an established multimillion-dollar business to open an account.|
|Vectra Bank||X||Banks MSBs, but will not bank bitcoin-related businesses.|
|Wells Fargo||X||No bitcoin accounts
Once linked to a bank account the process is quite simple.
Alternatively, BTM owners can link their machines to an exchange like Bitstamp or Kraken.
A similar transaction flow can also be established through mining pools like Cumberland Mining. These mining pools sit on large caches of Bitcoin and other cryptocurrencies and are thereby able to provide digital assets to BTM owners.
Picking the perfect location
Accessibility, high foot traffic & hours of operation. Average renting place is $300 – $700/ Month.
Here are the 5 most common locations for placing BTMs
- Restaurants & Pizzerias – 12%
- Cafes/Coffee shops – 9%
- Shopping Malls – 7%
- Company offices – 7%
- Supermarket/Deli/ Convenience store – 6%
Customer support & equipment maintenance
It is important that a customer has the best experience possible while handling funds. Making sure machines are operational and bitcoin funds are available is just as important as making sure there is a customer support system available.
Conducting a Break-Even Analysis
Like with all businesses, it is important to understand when you can expect your Bitcoin ATM business to hit break-even and become profitable.
Use this free and easy tool to get a good estimate of when you can expect your investment to become worthwhile financially.
Other things to keep in mind
Make sure the BTM will be in a safe location. People will be handling money and they will always opt for an “ATM-like” environment.
Make sure you can verify that the BTM was properly installed. That included bolting it down is necessary.
A “Bitcoin sold here” sign outside the facility will help direct traffic into the store. This could also help the owner of the Brick & Mortar business.
Choosing the right Crypto ATM Company
While the bitcoin ATM industry is just getting started, there are already a number of options available from who you can purchase your BTMs.
- Extremely user-friendly consumer interfaces
- 24/7 maintenance service available at low costs
- Leading manufacturer since 2013
- Boasts fast ROI
General Bytes has several models available including the BATMThreeL, BATMThreeM, and BATMThreeXL. Prices range from $7,499 to $9,499. Shipping costs between $200 to $800.
A 0.5% free on turnover if General Bytes’s server is used
- Oldest BTM company in existence
- The modern and sleek physical design
- Simple and clean user interface
- Premium open source back end control available
- No licensing fees
- Supports Bitcoin, Ethereum, ZCash, Bitcoin Cash, Dash, Litecoin
- Supports BitPay, Bitstamp, Kraken, itBit, and Coinbase
- Optional support coverage
Lamassu offers four models of their BTMs; the Gaia (~$4,000), Sintra ($8,250), Sintra Forte ($9,800), and Douro II ($5,000).
According to Lamassu, “We made a decision to keep the network of Lamassu machines private and distributed. You own the hardware outright and the software is open source.”
Therefore, Lamassu in incapable of charging transaction fees on your BTM.
Optional monthly support coverage is available at a cost of $100/month per machine.
- Based in Canada
- Offers fleet monitoring for both small and large BTM networks
- Compliance-ready machines
- 2FA-ready software
- 24-hour email and phone customer service
- Software updates are installed automatically
- Provides digital receipts
BitAccess has two operators available. The BTM C, which costs $6000 and the BTM SE which costs $8000.
20% of earned fees volume
- Founded in 2015
- Over 200 Locations in California, Oklahoma, Nevada, Texas, Louisiana, Florida, Missouri, New Jersey, New York, Pennsylvania, Tennessee, Arizona, Georgia, Rhode Island, New Hampshire, Massachusetts, Colorado, Maryland, Virginia, Delaware, Mississippi, Arkansas, and the District of Columbia
- Fastest machines to operate with cash
- Top-tier software stack
Coinsource does not list their fee schedule on their website
- Leading BTM operator in the United States
- Low fees
- Easy verification process
- Instant support
- Referral programs available
- Price match guarantees within 10 miles of competitor
According to Coinflip:
“The rate for BTC at our ATMs is 6.99% above the Tradeblock XBX index spot price for buys, and 3.99% below for sells. In some locations, our fees may be even lower due to fewer operational expenses. Our standard flat fee to cover the mining cost is $0.99, but in times of high demand, we may raise this fee in order to ensure timely processing of your transaction.”
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