Cryptocurrency
Economics of Bitcoin ATM market could hinder wider adoption
ATM service provider, Bitcoin of America, had carved out a slice of the market but recently closed shop in the United States State of Connecticut due to a lack of proper licensing.
The Connecticut Department of Banking (DoB) issued a cease and desist order against the company, accusing it of operating unlicensed crypto ATMs in the state. But the allegations didn’t stop there; the firm was also accused of facilitating scams by allowing transactions related to fraudulent activities.
In response to the challenges, Bitcoin of America released a statement claiming it would immediately halt all of its operations in Connecticut. While the decision marked the end of the company’s presence in the state, it also underscored the regulatory hurdles faced by crypto ATM operators, particularly in the United States.
The closure also sent ripples across the crypto community, leading many industry observers to question the long-term efficacy and utility of these machines.
Connecticut closure explained
Due to the nascency of the cryptocurrency industry, marrying digital currencies with conventional financial structures — as in the case of crypto ATMs — requires intricate regulatory supervision. This is particularly true in Connecticut, where the DoB oversees ATMs under the Money Transmission Act.
The act requires that any service involving the transfer of money, including the conversion of traditional currency to cryptocurrency, must secure a money transmitter license.
On May 22, the Connecticut DoB claimed that Bitcoin of America had not secured the necessary license to operate Bitcoin ATMs in the state. It further stated that four Connecticut Bitcoin ATM users were scammed out of tens of thousands of dollars via Bitcoin of America’s kiosks.
The DoB stated: “Bitcoin of America, following the consent order, compensated these consumers with a total of $86,000. After facing criminal charges, Bitcoin of America is in the process of ceasing its operations in Connecticut.”
In a separate incident in March, state officials in Ohio seized 52 Bitcoin of America ATMs, as authorities suspected scammers were using the kiosks.
Operating crypto ATMs is harder than it looks
Jason Grewal, chief legal officer for Web3 security firm Sys Labs, told that running a crypto ATM involves much more than just acquiring a license.
Operators in the U.S. must adhere to Anti-Money Laundering (AML) rules set by the Financial Crimes Enforcement Network, comply with the Bank Secrecy Act’s Know Your Customer (KYC) norms, and conform to the Internal Revenue Service’s requirements for reporting crypto transactions.
In Grewal’s opinion, such complexities could play a significant role in the waning popularity of these machines. In March alone, a staggering 3,627 cryptocurrency ATMs went offline, marking the most significant monthly decrease in the history of crypto ATMs. He said:
“Considering the shifting popularity of crypto ATMs, various factors seem to be at play. For one, the transaction fees imposed by these machines often exceed those on online exchanges, posing a deterrent for heavy users. Additionally, the necessity to satisfy complex regulations and licensing requirements can be challenging and potentially overshadow the perceived advantages of in-person crypto transactions.”
Further tipping the scales away from crypto ATMs are alternatives like decentralized exchanges (DEXs) and decentralized finance (DeFi) platforms.
Lower transaction costs, universal access, superior privacy and a broader range of supported cryptocurrencies make these projects increasingly compelling to many people. DeFi platforms also offer features such as staking, yield farming and borrowing — services typically absent from crypto ATMs.
Grewal believes that moving forward, crypto ATM operators will have to innovate and change to better serve the evolving needs of their consumers.
Robert Quartly-Janeiro, chief strategy officer for cryptocurrency exchange Bitrue, told Primary companies currently dominate the crypto ATM market, something which needs to change for the market to grow and adoption to increase.
Moreover, he believes that the physical location of crypto ATMs is also a major factor when it comes to engaging customers. He added:
“Ultimately, one of the key pillars for the mass adoption of crypto remains the ability to sell crypto for fiat currencies in-country. The landscape has changed slightly, so the need for crypto ATMs has changed economically, geographically, psychologically, as well as from an infrastructural standpoint.”
The economics of crypto ATMs
Most crypto ATMs in operation today run in collaboration with established companies like ChainBytes, LibertyX, CoinMe and others, which allow independent businesses to become “operators,” “partners,” or “hosts” for these machines.
The return on investment depends on several factors, including the location of the business (e.g., commercial district, high-traffic area); the number of daily transactions; the average transaction size; the total expected revenue from transaction fees; and the marketing strategy to promote the crypto ATM in question.
According to crypto ATM firm Chainbytes, a single Bitcoin ATM can earn up to $3,000 monthly, with gross monthly revenues of $30,000.
Operating a crypto ATM presents several challenges as well. Regulatory complexities require operators to navigate often unclear laws, obtain necessary licenses, and comply with AML and KYC regulations. Security risks, both physical and digital, necessitate robust protective measures, adding to high operational costs that include machine maintenance and cash management.
The inherent volatility of cryptocurrencies can also impact profitability, with significant value fluctuations potentially leading to financial losses. Operators must also maintain sufficient cryptocurrency and cash reserves to meet customer demand, as shortages could harm their reputation and business.
Who’s leading the global crypto ATM race?
Since the first crypto ATM debuted in a Vancouver coffee shop in 2013, the sector has evolved dramatically. Today, there are around 35,000 machines globally, transforming how people interact with digital currencies.
The United States has the lion’s share of crypto ATMs globally. Source: Coin ATM Radar
The U.S. houses roughly 30,000 crypto ATMs, accounting for 86% of all such machines worldwide.
Canada’s crypto ATM scene has also flourished over the last few years. As of Q1 2023, the country hosts 2,744 machines, while its European compatriot Spain boasts around 286 machines.
Down under, Australia has also been making waves. After adding 99 ATMs in late 2022, it leapfrogged El Salvador and Poland to become the fourth-largest crypto ATM hub with around 473 kiosks.
The future of crypto ATMs
Despite the many hurdles impeding the growth of the crypto ATM market, the space is expected to grow significantly in the coming years. The market — valued at $71.9 million in 2021 — is projected to rise to $5.45 billion by 2030.
However, for the sector to thrive, it will be crucial for operating companies to obtain regulatory clarity. Physical and digital security measures must also be enhanced to protect the machines and the transactions they facilitate. This includes robust cybersecurity measures to prevent digital hacks and adequate physical security to deter theft attempts.
Finally, efforts must be made to reduce the operational costs of running these machines. This could involve developing more cost-effective kiosks, optimizing cash management processes and exploring alternative business models. Thus, as we head into a future driven by crypto-enabled tech, it will be interesting to see how the future of the crypto ATM market continues to evolve and grow.
This week, we take a closer look at Ethereum, Ripple, Cardano, Shiba Inu, and Polkadot.
Ethereum (ETH)
Ethereum’s downtrend appears to be coming to an end as the price has decided to move sideways above the key support. For this reason, ETH closed the week with a 2% price increase.
This cryptocurrency is now in a range between support at $2,900 and resistance at $3,370. The longer it consolidates here, the more significant the eventual breakout will be.
Looking ahead, ETH did a bullish cross on the daily MACD, which could bring optimism and put bulls back in charge. To confirm a bullish bias, the resistance at $3,370 has to fall.
Ripple (XRP)
Earlier this month, XRP failed to hold above 53 cents and fell all the way to 43 cents, which is currently acting as a key support. XRP bounced on this level and managed to close the week with a 6% price increase.
Even if buyers managed to defend the price and keep it above 43 cents, they seem unable to push this cryptocurrency to new highs. The resistance is at 54 cents and may stop any renewed buying interest.
Looking ahead, XRP has been stuck in a large range since late 2023 and was unable to have a major breakout. This has not changed this year so far. Until that happens, don’t expect a significant rally.
Cardano (ADA)
ADA managed to find good support at 46 cents and closed the week with a 2.6% price increase. As long as the key support holds, buyers could aim to regain control of the price action.
The current resistance is at 61 cents, and Cardano has not tested this level yet. A relief rally could follow if the support holds. At that point, a test of the key resistance becomes possible.
Looking ahead, if buyers manage to stop the downtrend here, they could attempt to put this cryptocurrency back on an uptrend in the coming month.
Shiba Inu (SHIB)
Shiba Inu closed the week with a 14% price increase, making it the best performer on our list. This is an impressive recovery considering that a week before the price made new local lows.
The key support is found at $0.000025. So far, buyers managed to hold here and defend SHIB from further sell pressure. The resistance is at $0.000037.
Looking ahead, the ideal scenario for this meme coin is to range above the key support and eventually attempt a new rally in May.
Polkadot (DOT)
DOT’s price action is similar to Cardano and managed to find good support above $6.7. For this reason, the price closed the week with a 1.8% price increase.
The correction appears to be coming to an end and as long as the key support holds then buyers can use this period to gather strength for an attempt at the key resistance currently found at $7.7.
Looking ahead, DOT may consolidate here before it attempt to resume its uptrend. This is contingent on the overall market turning bullish.
LIMITED OFFER 2024 for CryptoPotato readers at Bybit: Use this link to register and open a $500 BTC-USDT position on Bybit Exchange for free!
Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.
Cryptocurrency charts by TradingView.
TL;DR
- Some analysts point to potential bearish trends for Bitcoin, predicting a drop to as low as $59,000, suggesting the cryptocurrency has reached its cycle peak.
- Peter Schiff continues his critical stance on BTC, identifying $60,000 as a key resistance level and warning of a significant potential decline if this is not overcome.
A Bearish Outlook
Bitcoin’s price has been hovering around $64,000-$67,000 in the past few days, currently trading at the lower mark. While the majority of industry participants remain optimistic that a substantial rally is just behind the corner due to the halving that took place last week, some analysts outlined somewhat bearish forecasts.
One example is the popular X user Ali Martinez, who noticed two sell signals on BTC’s 12-hour chart: “a death cross between the 50 and 100 SMA and a red 9 candlestick from the TD Sequential.”
He believes a further plunge below $63,300 may trigger a price downfall to $61,000 or even a two-month low of $59,000.
Another trader who presented a worrying scenario for BTC bulls is Mikybull Crypto. The analyst assumed that the leading digital asset has reached its cycle top and expects a price retreat from now on.
#Bitcoin is not looking great here
The cycle top is in I’m afraid pic.twitter.com/kAEMvc7egt
— Mikybull 🐂Crypto (@MikybullCrypto) April 25, 2024
The Ultimate Bear
When speaking of people who believe BTC’s value is on the verge of a decline, one should mention Peter Schiff. Most recently, the American stockbroker (who is among the harshest critics of the cryptocurrency) claimed that the asset’s current condition “is not looking good for HODLers.” He pinpointed the $60,000 level as a major resistance zone, or otherwise, BTC is going “a long way down.”
This is not the first time Schiff has predicted a grim future for the cryptocurrency. Last year, he envisioned that BTC’s rally will cease once the US SEC approves the first spot Bitcoin ETFs in the world’s biggest economy.
Recall that the regulator gave the thumbs up in January when the price of the asset was hovering around $46,000. BTC has charted a 40% increase since then.
LIMITED OFFER 2024 for CryptoPotato readers at Bybit: Use this link to register and open a $500 BTC-USDT position on Bybit Exchange for free!
Cryptocurrency
Slothana Enters Final 2 Days of Presale After Raising $15M – Next Solana Meme Coin to Explode?
Slothana, one of the most successful Solana meme coin presales so far, is gearing for its exchange launch as its ICO ends in two days.
This means that traders face their last opportunity to buy $SLOTH at a fixed price before it opens to the broader market, and its price becomes subject to supply and demand dynamics.
Slothana is bound to cause a stir on its IEO, with its record-breaking $15 million total raise reflecting an unrivaled market appetite.
Slothana: Unlike Anything Before
The Solana presale circuit has gifted risk-taking degens several opportunities for life-changing wealth.
Two of the most notorious are Book of Meme and Slerf, which both witnessed monumental success after their IEOs and made many millionaires in the process.
The phenomenon was widely covered; for instance, LookOnChain tracked blockchain activity to report how one BOME presale investor turned $72K into over $30 million.
However, Slothana’s $15 million total raise has already overshadowed BOME’s ($2 million) and Slerf’s ($10 million).
Slothana’s success is fueled by a slew of bullish factors, each feeding confidence to the Solana community.
Like BOME and SLERF, the sloth-themed meme coin adopts a laid-back single-tiered pricing system, ensuring all investors have equal opportunity and laying the way for a successful IEO where all holders work together.
Potential investors have two ways to buy the presale: sending SOL to the project’s wallet address or connecting their wallet to the presale site’s buy widget, offering a more seamless user experience.
But while these factors have struck a chord in the community, rumors that the anonymous Slothana team is the same quick-witted crew that created Smog are causing a frenzy.
Smog and Slothana?
It’s often thought that meme coin success is flippant and accidental, requiring nothing but luck and chance for projects to rise up the market leaderboard. However, that is rarely the case.
Hundreds of new meme coins launch daily, but most fall as quickly as they rise (and many never actually rise). This hyper-competitiveness makes it harder to get noticed, and the projects that do usually have some far-sighted help at hand.
In Slothana’s case, the community believes its founders are the same savvy marketers and developers who launched the Smog token.
Smog is a Solana-based meme coin that exploded over 100x after launching in February, peaking at a $270 million market cap within weeks. Indeed, with both seeing near-instant success, it is easy to see why speculators connect them.
But the community has spotted an even more undeniable connection, with Smog commenting on Slothana’s first X post when it had less than 50 followers.
While this does not inherently mean both projects have the same founders, it does illustrate they are connected on some level, reflecting a bright future for the latest Solana phenomenon.
That said, the opportunity to buy Slothana at presale is ending soon. With just two days until the ICO concludes, potential investors must be fast.
Follow the project on X to stay updated. Alternatively, visit its website to buy tokens.
Disclaimer: The above article is sponsored content; it’s written by a third party. CryptoPotato doesn’t endorse or assume responsibility for the content, advertising, products, quality, accuracy, or other materials on this page. Nothing in it should be construed as financial advice. Readers are strongly advised to verify the information independently and carefully before engaging with any company or project mentioned and do their own research. Investing in cryptocurrencies carries a risk of capital loss, and readers are also advised to consult a professional before making any decisions that may or may not be based on the above-sponsored content.
Readers are also advised to read CryptoPotato’s full disclaimer.
LIMITED OFFER 2024 for CryptoPotato readers at Bybit: Use this link to register and open a $500 BTC-USDT position on Bybit Exchange for free!
Forex2 years agoForex Today: the dollar is gaining strength amid gloomy sentiment at the start of the Fed’s week
- Forex2 years ago
How is the Australian dollar doing today?
- Forex1 year ago
Unbiased review of Pocket Option broker
- Forex2 years ago
Dollar to pound sterling exchange rate today: Pound plummeted to its lowest since 1985
- Cryptocurrency2 years ago
What happened in the crypto market – current events today
- World2 years ago
Why are modern video games an art form?
- Stock Markets2 years ago
Morgan Stanley: bear market rally to continue
- Economy2 years ago
Crude oil tankers double in price due to EU anti-Russian sanctions
