Bitcoin Depot, the largest Bitcoin ATM operator in the United States, has demonstrated robust revenue performance despite the volatility inherent in cryptocurrency markets.
According to its recently submitted 10-K annual report on April 15, the company disclosed revenues of $689 million in 2023 and $647 million in 2022, indicating a consistent revenue stream unaffected by fluctuations in Bitcoin prices.
Bitcoin Depot’s Resilient Revenue Amidst Cryptocurrency Price Volatility Despite the highly erratic nature of cryptocurrency prices, Bitcoin Depot has sustained its revenue stream without significant disruption. Even during periods of extreme volatility in Bitcoin’s value, the company has maintained stable revenues. Notably, in 2023, when Bitcoin’s price surged by 155%, Bitcoin Depot’s revenue growth remained modest at 6%, underscoring its resilience to market turbulence.
This resilience is attributable to Bitcoin Depot’s strategic focus on providing services primarily for non-speculative purposes, such as facilitating money transfers, international remittances, and online purchases, as evidenced by user surveys conducted by the company. Unlike entities heavily involved in cryptocurrency trading or mining, Bitcoin Depot typically holds a relatively low balance of Bitcoin, usually less than $0.8 million, at any given time.
Moreover, Bitcoin Depot has proactively mitigated its exposure to Bitcoin’s volatility by maintaining a conservative balance of Bitcoin, typically below $1 million. The company’s approach involves procuring Bitcoin through reputable liquidity providers like Cumberland DRW or Abra, rather than engaging in mining operations.
“We employ a sophisticated Bitcoin management process to mitigate our exposure to volatility in Bitcoin prices by maintaining a relatively low balance (typically less than $1 million) of Bitcoin at any given time,” the company stated in its filing. This strategic approach distinguishes Bitcoin Depot from its competitors and effectively manages principal risk.
In its transactions, Bitcoin Depot does not act as an agent or exchange for users; 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.
Bitcoin Depot’s operational working capital comprises 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 the Global Bitcoin ATM Market Amidst Installations Downturn Bitcoin Depot has cemented its position as the leading cryptocurrency ATM operator globally, boasting a vast network of over 7,000 BTMs worldwide since its inception in 2016. This surpasses the machine counts of its main competitors, CoinFlip and BitStop, which operate 4,800 and 2,500 machines, respectively, according to data from CoinATMRadar as of April 2024.
However, despite Bitcoin Depot’s success, the broader trend in the Bitcoin ATM market saw a decline in installations for the first time in a decade in 2023. Coin ATM Radar data indicates 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 pronounced in the United States, which hosts 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, anticipating a significant rebound following the impending Bitcoin halving event. This event, which reduces the reward for mining new blocks in the Bitcoin network, is often associated with heightened market activity and increased interest in cryptocurrencies.