Friday , October 7, 2022

As The Value of Crypto Plummets, So Do Installations of Crypto ATMs

After riding a strong growth wave in 2021, installations of specialized ATMs that allow users to convert their local currencies, such as the U.S. dollar, into cryptocurrencies have cooled off considerably in 2022.

Through August, just 5,000 cryptocurrency ATMs have been installed globally this year, bringing the total to more 39,000 machines, according to a report from SkyQuest Technology Consulting Pvt. Ltd. The current installation rate significantly lags the pace of 2021, when more than 20,000 new cryptocurrency ATMs were installed globally, according to the report, released Tuesday.

The slowdown mirrors the rapid devaluation of most digital currencies since the start of the year, SkyQuest says. Bitcoin, for example, has lost 56% of its value in just one year. “Since most ATMs require users to deposit fiat currency in order to withdraw cryptocurrencies, an increase or decrease in the value of cryptocurrencies could lead to an overall decline or increase in the number of installations respectively in the crypto ATM market,” the report says.

Another potential factor in the decrease could be heightened regulatory scrutiny. Since the beginning of the year, many governments have begun taking a tougher regulatory stance on cryptocurrency. For example, Singapore, which prior to 2022 was considered a crypto-friendly country, began shutting down crypto ATMs this year.

“This stricter stance could lead operators in the global crypto ATM market to decide that it is not worth installing them in certain locations due to the high level of risk involved,” the report says.

Despite the slowdown, the United States remains home to the largest population of cryptocurrency ATMs, with more than 34,000 machines, Canada has the next-largest installed base, with 2,552 machines. Together, the two countries house more than 90% of the world’s cryptocurrency ATMs, according to SkyQuest.

Other factors that could be influencing the slowdown is that some crypto ATM operators are struggling to keep up with a surge in demand, while some have gone out of business. In addition, several hospitals and casinos have stopped installing crypto ATMs, as they do not make enough money from them, according to SkyQuest.

“Popularity is mainly due to the booming value of cryptocurrencies such as Bitcoin and Ethereum. But once the price of cryptocurrencies drops, so does the revenue from crypto ATMs,” the report says.

Even though cryptocurrency valuations are falling, and in turn the installations of cryptocurrency ATMs, SkyQuest is predicting global cryptocurrency ATM sales will reach a valuation of $1.3 billion in 2028, up from $99.7 million in 2021.

Check Also

Uber Readies Its Pro Card And Other Digital Transactions News briefs from 10/6/22

The ride-share provider Uber is working with card-issuing platform Marqeta and fintech bank Branch to …

Digital Transactions