Global crypto ATMs face significant decline in 2023

Once reaching its peak of 39,350 machines in December 2022, the number of cryptocurrency automated teller machines or ATMs saw an unexpected decline to 33,620 by the end of 2023.

This reduction was evident in the initial four months of the year. January witnessed the removal of approximately 1,523 devices, followed by 210 machines in February and a substantial elimination of 3,555 ATMs in March. April continued the downward trend with an additional 340 machines being taken out.

May, however, served as a turning point. During this month, 1,711 machines were installed, followed by an additional 857 in June. But the trend took a severe hit shortly after.

In July, around 4,218 machines were decommissioned, marking the most substantial monthly decline ever recorded. Although subsequent months saw net additions, none were sufficient to offset the earlier losses.

Globally, Bitcoin Depot emerged as the leading crypto ATM operator with 6,311 machines, closely followed by Coinflip with 3,880 devices.

As of December 30, 2023, Bitstop operated 2,854 machines, Rockitcoin oversaw 2,227 units and Athena Bitcoin rounded off the top five with 1,891 crypto ATMs.

Most cryptocurrency ATMs, around 82.2 percent, are in the United States. Canada hosts approximately 8.4 percent of these machines.

Bitcoin ATM operators in the U.S. are required to comply with the Bank Secrecy Act (BSA), mandating the establishment and maintenance of the Anti-Money Laundering (AML) program to prevent the illegal use of these ATMs.

These operators must also register as Money Service Businesses and fall under the Financial Crimes Enforcement Network regulation.

On the other hand, the Financial Conduct Authority (FCA) in the United Kingdom declared in March 2022 that all cryptocurrency ATMs in the country were illegal and needed to be shut down. None of the operators of these ATMs had successfully registered with the agency.

The FCA pointed to a failure to comply with Know Your Customer laws (KYC), designed to track and prevent money laundering, as well as the high risk to customers due to a lack of regulation and protection. At that time, Coin ATM Radar listed 81 ATMs nationwide.

Contributing factors

The fluctuations in the number of cryptocurrency ATMs have raised questions about the factors contributing to their notable decline.

The reasons behind this downturn remain unclear, with potential explanations ranging from shifting market dynamics to the aftermath of challenging periods for the crypto industry.

In addition, the notable downturn could also be interpreted as a signal of waning interest in crypto ATMs. Otherwise, it may reflect the repercussions of the tumultuous ‘crypto winter’ experienced in 2022, which left lasting impacts on the cryptocurrency landscape.

The crypto winter of 2022 was marked by a confluence of challenges, driving down the prices of major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), XRP (XRP) and others by over 55 percent.

Triggered by surging U.S. inflation, the Federal Reserve responded by aggressively raising interest rates. Investors, in turn, began offloading risk assets, including cryptocurrencies and stocks.

Although Bitcoin prices recovered above $30,000 in April 2023, debates among investors and analysts persisted about whether the crypto winter had truly come to an end or if challenges still loomed for Bitcoin and other cryptocurrencies.

In March 2023, the Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance, accusing the company of permitting U.S. customers to trade on its platform without the required registration under U.S. law.

Coinbase also revealed that it had received a notice from the U.S. Securities and Exchange Commission (SEC) indicating potential violations of securities laws.