Bitcoin Depot, the leading Bitcoin ATM operator in the United States, has reported strong revenues despite the volatile nature of cryptocurrency prices.
In its recently filed 10-K annual report on April 15, the company disclosed revenues of $689 million for 2023 and $647 million for 2022, showing no significant correlation with fluctuations in Bitcoin’s price.
Bitcoin Depot’s Resilient Revenue Amidst Bitcoin Price Volatility
Despite the unpredictable swings in cryptocurrency prices, Bitcoin Depot has demonstrated resilience with its revenues remaining steady and unaffected. Even during periods of extreme volatility in Bitcoin prices, the company’s revenues have remained robust. For example, despite Bitcoin’s price soaring by 155% in 2023, Bitcoin Depot experienced a modest year-over-year revenue growth of only 6%, showcasing its ability to withstand market turbulence.
This resilience can be attributed to Bitcoin Depot’s strategic approach to its services, which primarily focus on non-speculative purposes such as money transfers, international remittances, and online purchases, as indicated by user surveys conducted by the company. Unlike entities heavily involved in cryptocurrency trading or mining, Bitcoin Depot maintains a relatively low balance of Bitcoin, typically less than $1 million, at any given time.
Moreover, Bitcoin Depot has proactively minimized its exposure to Bitcoin’s volatility by adopting a strategic approach to managing its Bitcoin balance. The company purchases Bitcoin through reputable liquidity providers like Cumberland DRW or Abra rather than engaging in mining activities.
“We use a sophisticated Bitcoin management process to reduce our exposure to volatility in Bitcoin prices by maintaining a relatively low balance (typically less than $1 million) of Bitcoin at any given time,” stated the company in its filing.
Bitcoin Depot does not serve as an agent or exchange for users in its transactions. Instead, it maintains Bitcoin balances to fulfill user demand from kiosk or BDCheckout transactions. As users receive Bitcoin, the company replenishes its balance through purchases from leading liquidity providers.
The working capital required for Bitcoin Depot’s operations consists of Bitcoin held in hot wallets to fulfill user orders and cash accumulated in Bitcoin ATM kiosks. As of December 31, 2023, cash in the BTM kiosks represented approximately 21% of the company’s average monthly revenues. This dual approach to managing Bitcoin and cash balances contributes to the stability and resilience of Bitcoin Depot’s business model.
Bitcoin Depot Leads Global Bitcoin ATM Market Amidst Decline in Installations
Bitcoin Depot has solidified its position as the largest cryptocurrency ATM operator globally, operating a vast network of over 7,000 BTMs worldwide. In comparison, its main competitors, CoinFlip and BitStop, operate 4,800 and 2,500 machines, respectively, according to data from CoinATMRadar as of April 2024.
Despite Bitcoin Depot’s success, the overall trend in the Bitcoin ATM market witnessed a decline in installations for the first time in a decade in 2023. Coin ATM Radar data shows an 11% decrease in installed Bitcoin ATMs globally, dropping from 37,827 on January 1, 2023, to 33,622 on the same date in 2024.
This decline was particularly notable in the United States, which accounts for 82% of all Bitcoin ATMs globally. The number of Bitcoin ATMs in the US decreased from 32,672 to 27,621 throughout 2023, marking the first year-over-year decline in installed BTMs.
Bitcoin Depot’s CEO, Brandon Mintz, remains optimistic about the ATM industry’s future. He anticipates a significant rebound following the much-awaited Bitcoin halving event, which is expected to occur soon. The Bitcoin halving event, which reduces the reward for mining new blocks in the Bitcoin blockchain by half, typically triggers increased interest and activity in the cryptocurrency market.
