The cryptocurrency market has seen its fair share of ups and downs over the years. While many digital currencies have experienced a resurgence in recent times, the infrastructure supporting them, particularly Bitcoin BTC -1.76% ATMs, has witnessed a significant decline.
According to recent data from AltIndex, the number of Bitcoin ATMs installed worldwide has plummeted to a two-year low. Since the end of the previous year, there has been a sharp decrease of 7,000 machines, marking a 17% reduction, bringing the total count to 32,500. This decline is particularly surprising given that there was an increase from 34,500 ATMs at the end of 2021.
The United States, which boasts the highest number of Bitcoin ATMs globally, has seen the most substantial drop.
Currently, there are approximately 26,700 machines across the country. Despite this decline, the U.S. still has nearly 18 times more Bitcoin ATMs than the entire European region, which hosts around 1,500 machines.
Several factors contribute to this decline. One of the primary reasons is the growing controversy surrounding the potential criminal use of these ATMs.
Scammers have been known to exploit platforms like eBay, urging unsuspecting buyers to deposit funds into specific Bitcoin wallets using ATMs. Once the funds are transferred, these scammers disappear, leaving the buyers without their money or the goods they intended to purchase.
Brandon Mintz, the CEO and founder of Bitcoin Depot, provided another perspective on the decline. He suggested that the downturn is partly due to operators shutting down unprofitable ATMs or even going out of business. However, Mintz views this trend as an opportunity for companies like his to expand their market share through acquisitions and organic growth in additional retail locations.
The significant reduction in Bitcoin ATMs raises questions about their future role within the cryptocurrency ecosystem. While controversies surrounding their potential misuse for illicit activities might have contributed to the decline, market forces and profitability concerns are also significant factors.
One notable casualty of these market forces was the crypto ATM operator Cash Cloud.
In February, the company filed for bankruptcy. Operating under the name Coin Cloud, the firm had assets ranging between $50 million and $100 million, liabilities between $100 million and $500 million, and creditors numbering between 5,000 and 10,000. At its peak, the company had over 5,000 Coin Cloud ATMs in 47 U.S. states and Brazil. These ATMs allowed users to transact with various cryptocurrencies, including Bitcoin, Ethereum ETH -2.99%, Dogecoin DOGE -2.89%, and Shiba Inu.