Bitcoin Depot, the largest Bitcoin ATM operator in the United States, reported robust revenue despite the highly volatile nature of cryptocurrency prices.
In its recently filed 10-K annual report on April 15, the company revealed that its revenue in 2023 and 2022 was $689 million and $647 million, respectively, showing no significant correlation with Bitcoin’s price fluctuations.
Bitcoin Depot Reports Resilient Revenue Amid Bitcoin Price Volatility
Despite cryptocurrency prices’ rollercoaster ride, Bitcoin Depot has weathered the storm with no significant impact on its revenue. Even during extreme volatility in Bitcoin prices, Bitcoin Depot’s revenue has remained steady and unaffected. For example, while Bitcoin rose 155% in 2023, the company’s year-over-year revenue growth was a modest 6%, demonstrating its resilience against market turbulence.
This resilience stems from Bitcoin Depot’s strategic approach to its services, which are primarily used for non-speculative purposes such as money transfers, international remittances and online purchases, as indicated by user surveys conducted by the company. Unlike some entities heavily involved in cryptocurrency trading or mining, Bitcoin Depot maintains a relatively low balance of Bitcoin, usually less than $0.8 million, at any given time.
Furthermore, Bitcoin Depot has taken proactive steps to reduce its exposure to Bitcoin’s volatility by maintaining a relatively low balance of Bitcoin, usually less than $1 million. The company’s strategy involves purchasing Bitcoin through trusted liquidity providers such as Cumberland DRW or Abra rather than engaging in mining activities.
“We use a sophisticated Bitcoin management process to reduce our exposure to Bitcoin price volatility by maintaining a relatively low balance (typically less than $1 million) of Bitcoin at any given time,” the company said in its filing . This approach differentiates Bitcoin Depot from its competitors and helps effectively manage principal risk.
Bitcoin Depot does not act as an agent or exchange for users in its transactions. Instead, it maintains Bitcoin balances to meet 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 revenue. 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 Amid Declining Installations
Bitcoin Depot, a prominent player in the Bitcoin ATM (BTM) industry, has strengthened its position as the largest cryptocurrency ATM operator worldwide. Founded in 2016, Bitcoin Depot operates a large network of over 7,000 BTMs worldwide, allowing users to conveniently deposit and withdraw money using cash or a debit card.
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 the success of Bitcoin Depot, the overall trend in the Bitcoin ATM market saw a decline in installations in 2023 for the first time in a decade. Coin ATM Radar data shows an 11% decrease in installed Bitcoin ATMs worldwide, falling from 37,827 on January 1, 2023, to 33,622 on the same date in 2024.
This decline was particularly noticeable in the United States, which accounts for 82% of all Bitcoin ATMs worldwide. The number of Bitcoin ATMs in the US decreased from 32,672 to 27,621 during 2023, marking the first year-over-year decline in installed BTMs.
Bitcoin Depot CEO Brandon Mintz remains optimistic about the ATM industry’s future. He expects a significant recovery after the long-awaited Bitcoin halving event, which is expected to happen soon. The Bitcoin halving event, which reduces the reward for mining new blocks in the Bitcoin network, is often associated with increased market activity and interest in cryptocurrencies.
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While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
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And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
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