The crypto automated teller machine (ATM) works as the common terminal but operates with cryptocurrencies, mostly Bitcoin. Using the cryptocurrency ATM, people can buy crypto, send it to a specific address, or sell it in exchange for cash.
In 2021, the market size for cryptocurrency ATMs exceeded $250 million, and it continues to grow. Experts and analysts forecast growth of $2.37 billion by 2026, or over 50% in terms of CAGR. CAGR stands for compound annual growth rate, a metric that evaluates the annual return of investments, or how much money the investors can earn in a specified time.
Major Market Driver
In 2021, the crypto market was at its peak. The price of Bitcoin almost reached $70,000, so the related industries also boomed. Thus, the largest cryptocurrency ATM network, Bitcoin Depot, announced a plan to install 350 new terminals in the US alone. The costs of manufacturing and installation, together with the supporting technologies, are the main drivers in this market.
In 2022, after a crash of two large crypto platforms, Terra and Celsius, the price of Bitcoin dropped below $20,000 (at the time of publication), so the expansion plan can be reviewed. However, vendors invested too much into new ATMs and related technologies to pull back quickly. They will likely take solace in the positive long-term forecast.
Major Cryptocurrency ATM Market Challenge
There is no single opinion about cryptocurrencies in the world. An attitude to Bitcoin and other coins in different countries varies from hostility to legal tender. Every move that makes crypto market regulation easier opens new opportunities for cryptocurrency ATMs, but the legalization process goes slowly and chaotically. So, market regulations are the main challenge now.
Major Countries for Cryptocurrency ATMs market
The United States, Canada, China, Japan, Germany, and France are the target countries for Cryptocurrency ATMs now. These countries have already developed mild laws — Bitcoin in these countries is legal, but with some limitations. Besides, the living standards in these countries are high enough to make them a target market for the fintech sector. Unsurprisingly, the largest share of current growth, over 43%, is attributed to the US and Canada.
Major Market Segments for Cryptocurrency ATMs
Two types of cryptocurrency terminals define two market segments. The one-way terminal allows purchasing of the cryptocurrency: a client pays by card or by cash and the crypto goes to the specified wallet. A two-way terminal also allows for selling cryptocurrency for cash. The use of one-way or two-way terminals depends on local legislation, but one-way ATMs are more affordable, so the growth in this segment is faster.
Market Structure for Cryptocurrency ATMs
The market in this niche is concentrated. It means that several large vendors occupy the market and there is almost no place for organic growth. Smaller players can hardly enter this niche. The fluctuating cryptocurrency prices push the small regional players off the market. While a few large international companies can diversify their business and wait until the new growth in the crypto market, small companies have to step away.
While cryptocurrency is still a new asset on the financial market, the cryptocurrency ATMs market is also volatile and somewhat unstable. Market analysts predict a growth of $2.37 billion by 2026. It appears to be a very optimistic forecast if the current Bitcoin fall will turn into a new crypto winter. However, if the crypto market returns to growth, the growth may well be above expectations.