The popularity of Bitcoin and other cryptocurrencies has been on the rise for some time now, with more and more people investing in these digital assets. However, physical ATMs dedicated to fiat-crypto conversions are on the decline, contradicting the growing global Bitcoin adoption rate. In March alone, 3,627 crypto ATMs were removed from the network, bringing down the total ATMs to 33,727.
The trend is reversing, according to data from Coin ATM Radar. The net change of cryptocurrency machines installed and removed monthly remained positive most times in the decade since the first Bitcoin ATM was launched on Oct. 29, 2013 – implying that total crypto ATMs worldwide were steadily increasing. However, net crypto ATM installations declined for four months between September 2022 and March 2023. Furthermore, with 3,627 crypto ATMs going down last month, March 2023 stands out as the month with the largest monthly decline.
The significance of this reduction seems enormous, considering that the highest number of ATMs installed in a month was 2,048 – back in January 2021. The chart above shows the number of Bitcoin machines installed over time, revealing the sudden drop in the total crypto ATMs.
On the bright side, April broke the three-month-long downtrend by recording 37 crypto ATM installations on April 1. Current market leaders in manufacturing crypto ATMs are General Bytes, BitAccess, and Genesis Coin.
However, for most people, this decline won’t have any immediate impact on their lives. Most Bitcoin investors in the developed world use smartphone apps or exchanges to buy and sell their digital assets. They can transfer their digital currencies to a bank account or use a debit card linked to the app or exchange to spend it.
Nevertheless, the decline in crypto ATMs is a worrying trend because it could suggest that people are losing faith in cryptocurrencies as an alternative to fiat currencies. It could also indicate that the demand for products that enable the conversion of fiat currency into cryptocurrencies is declining.
One of the reasons for the decline in crypto ATMs may be the increasing regulation and restrictions on cryptocurrencies around the world. Governments and financial regulators are attempting to mitigate the risks associated with cryptocurrencies, such as money laundering, tax evasion, and fraud.
Another reason for the decline in crypto ATMs could be the increasing popularity of decentralized finance (DeFi). DeFi is a financial system built on the blockchain that allows people to borrow, lend and invest in a decentralized way without intermediaries. People can also trade cryptocurrencies directly on decentralized exchanges (DEXs) without the need for an ATM.
In addition, the security incidents associated with crypto ATMs may also have contributed to their decline. In March, General Bytes experienced a security incident that saw its customers’ hot wallets accessed, resulting in the loss of customer funds. General Bytes has promised to reimburse the losses, but such incidents can undermine confidence in the security of crypto ATMs.
In conclusion, the decline in crypto ATMs is a worrying trend that could indicate a decline in the demand for products that enable the conversion of fiat currency into cryptocurrencies. Nevertheless, it is important to note that most Bitcoin investors in the developed world use smartphone apps or exchanges to buy and sell their digital assets – the decline in crypto ATMs may thus have little immediate impact. The decline may be due to various factors, including increasing regulation and restrictions, the growing popularity of DeFi, and security incidents associated with crypto ATMs. It remains to be seen whether the trend will continue or whether it will reverse in the future.
