Despite the high volatility of cryptocurrency prices, major industry players such as Bitcoin Depot, a leading Bitcoin ATM operator, report little impact on their business performance.
In its latest 10-K annual report filed on April 15, Bitcoin Depot disclosed that its revenues show no historical correlation with Bitcoin’s fluctuating prices.
The company reported revenues of $689 million in 2023 and $647 million in 2022, which did not fluctuate in tandem with Bitcoin’s price movements.
Throughout 2023, while Bitcoin’s value surged by 155%, Bitcoin Depot’s revenue grew by only 6%. This indicates a disconnect between the company’s financial performance and the cryptocurrency market trends.
The firm attributes this stability to the nature of its services.
According to Bitcoin Depot, “Based on our own user surveys, a majority of our users use our products and services for non-speculative purposes, including money transfers, international remittances, and online purchases, among others.”
Bitcoin Depot has taken measures to minimize its exposure to Bitcoin’s price volatility.
The company maintains a “relatively low balance” of Bitcoin, under $0.8 million at any given time, and replenishes its Bitcoin supply exclusively through purchases from top liquidity providers such as Cumberland DRW and Abra.
This strategy avoids the risks associated with Bitcoin mining.
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The operational finances of Bitcoin Depot involve two key components: Bitcoin stored in hot wallets to fulfill user transactions and cash accumulated in its Bitcoin ATM (BTM) kiosks.
As of the end of 2023, cash in these kiosks represented about 21% of the company’s average monthly revenues.
Established in 2016, Bitcoin Depot has grown to become the world’s largest cryptocurrency ATM operator as confirmed by CoinATMRadar.
With more than 7,000 BTMs globally as of April 2024, Bitcoin Depot leads its closest competitors, CoinFlip and BitStop, which manage 4,800 and 2,500 machines respectively.
Notably, 2023 marked the first-ever decline in the global installation of Bitcoin ATMs, reflecting a shift in the industry dynamics.
However, Bitcoin Depot’s CEO, Brandon Mintz, remains optimistic about the future, especially with the upcoming Bitcoin halving event expected this week, which he believes will catalyze a significant rebound in ATM industry growth.
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