Massive shutdown of 3,600 Bitcoin ATMs across the globe

The Great Crypto ATM Purge: How 2023 Became the First Year of Negative Growth

The Bitcoin ATM network has experienced its largest monthly decline in history, with over 3,600 machines shutting down in March 2023.

According to Investfox, this represents a 12% decrease from the previous month, and a 25% drop from the peak of 29,000 ATMs in December 2022.

What caused the decline?

Several factors contributed to the decline of the Bitcoin ATM network. Some of the main ones are:

Regulatory pressure: Many countries have tightened their regulations on cryptocurrency transactions and operations, making it harder and more costly for Bitcoin ATM operators to comply. For example, in the US, the Financial Crimes Enforcement Network (FinCEN) proposed a rule requiring Bitcoin ATMs to collect and report the personal information of customers who transact more than $3,000 per day. This would increase the operational costs and risks for the operators and deter potential customers who value privacy.
Security issues: Bitcoin ATMs are often targeted by hackers and thieves who try to steal the funds stored in the machines or the customers’ private keys. In March 2023 alone, there were several reported cases of Bitcoin ATM thefts and vandalism worldwide. For example, a group of masked men in Australia broke into a shopping mall and stole four Bitcoin ATMs worth $120,000. In Canada, a hacker managed to access and empty 17 Bitcoin ATMs operated by Instacoin remotely.
Market volatility: Bitcoin’s price has fluctuated wildly in the past few months, reaching new highs and lows almost every week. This makes it difficult for customers and operators to predict the profitability and risk of using Bitcoin ATMs. Customers may be reluctant to buy or sell Bitcoin when the price is too volatile, while operators may face losses or liquidity issues when the price moves against them.

What are the implications?

The decline of the Bitcoin ATM network has significant implications for the adoption and accessibility of a cryptocurrency. Bitcoin ATMs are one of the easiest and fastest ways to buy or sell Bitcoin using cash or cards without needing a bank account or an online platform. They also provide an alternative channel for people who live in areas with poor internet connectivity or limited financial services. With fewer Bitcoin ATMs, these people may face more barriers and challenges to access the cryptocurrency market.

However, some experts believe that the decline of the Bitcoin ATM network is not necessarily a bad thing for the industry.

They argue that Bitcoin ATMs are not essential for the growth and innovation of cryptocurrency, as they are still a niche service that caters to a small segment of users.

They also point out that there are other ways for people to buy or sell Bitcoin, such as peer-to-peer platforms, online exchanges, or mobile wallets. These methods may offer more convenience, security, and efficiency than Bitcoin ATMs.

What is the future of Bitcoin ATMs?

The future of Bitcoin ATMs is uncertain, as it depends on various factors such as regulation, technology, competition, and consumer demand. Some analysts predict that the Bitcoin ATM network will continue to shrink or stagnate in the coming months, as more operators exit the market or reduce their operations.

Others foresee that the Bitcoin ATM network will recover and grow again, as new entrants enter the market or existing operators expand their services. Some possible scenarios that could boost the Bitcoin ATM network are:

More favorable regulation: If regulators adopt a more supportive and flexible approach to cryptocurrency transactions and operations, it could encourage more operators to launch or maintain their Bitcoin ATMs. It could also attract more customers who feel more confident and comfortable using Bitcoin ATMs.
More advanced technology: If operators adopt more advanced technology to improve the security and functionality of their Bitcoin ATMs, it could reduce the risks and costs associated with running them. It could also enhance the user experience and satisfaction of their customers.
More diversified services: If operators offer more diversified services through their Bitcoin ATMs, such as supporting more cryptocurrencies, offering more payment options, or providing more value-added features, it could increase their competitive advantage and customer loyalty.

In conclusion, the Bitcoin ATM network has faced a significant decline in March 2023, due to various factors such as regulatory pressure, security issues,