Bitcoin ATM Profitability Part 1
Blog | Coin ATM Radar
Bitcoin ATM Profitability Part one — Theoretical Calculations
According to the data available the average fee taken by the operators for using the Bitcoin ATM is Five.2%. This rate could be used as a beginning point for calculation. Depending on the ATM provider, there potentially could be running (license) fees additionally to the one-time ATM purchase cost, like in the case of Robocoin the operator will have to pay 1% fee to the ATM provider (unless the life-time license is purchased for a lump-sum).
On this page you can find a Bitcoin ATM profit calculator for getting the feeling about comeback on investment. It is assumed that buy and sell operations are equal and are inputted in aggregate fields: the transactions number and average transaction size. Not all the Bitcoin ATMs support the two-way operations, so sometimes it is only buy operations, which the operator may take into forecast calculation. In fact, the buy and sell transations are different in characteristics. According to Robocoin statistics, 1/Trio of all operations are sell Bitcoin transactions and Two/Three are buy operations on average. Also the average size of operations varies — average buy is about $480, while average sell is $750.
Using the calculator we’ve created three screenplays for different price-segment Bitcoin ATMs. In all scripts we use 5% as Bitcoin ATM fee. In reality the operation metrics very depend on many factors: location, traffic, country etc. and may be adequately different from the ones assumed for our scripts.
Significant! The theoretical calculations do not include any marketing or promotion costs. Also we have not included any legal licensing or paperwork costs, which could be fairly considerable depending on the location (e.g. in US it may reach up to $50k). You may include these costs via the “Other” fields in the “Cost metrics” section (either one-time or running/monthly).
Screenplay one — “Skyhook”
This is the cheapest available on the market and popular Bitcoin ATM with a price of the Bitcoin machine at $999. As it is one-way only and also the bill acceptor is limited in capacity (500 bills) — it makes it the cheapest ATM, but on the other arm it is limited in operations (e.g. large Euro banknotes are not accepted, which should be supported soon) and in locations choice (e.g. normally it should be placed in a secure space like shop or cafe, so the availability time is limited — no 24/7 normally).
For the calculation we assumed one hundred transactions per month, average transaction of $50. Also it is assumed that no rent to be paid for the place and also the cash logistics are done by the operator.
Results demonstrate that the Bitcoin ATM payback period is only Four months, and normally it will bring $235 to the possessor as net cash flow every month after the comeback of investment:
According to the information from Skyhook possessor in Arizona the average transaction size for his location is inbetween $5-$20. After recalculating with average of $15 per transaction, we get payback period of 1 year and two months and the monthly net cash flow afterwards of only $70.Five.
Script two — “Lamassu / BitAccess / General Bytes / BTC-O-MATIC / BTCPoint”
This script combines many different Bitcoin ATMs from the middle price interval. Some of them support two-way operations, some are not. But in general these bitcoin machines are more solid than from Scenario1. For the calculation the following assumptions were used: ATM cost is $6000 (close to current Lamassu pricing), monthly number of transactions — 100, and the average transaction size is assumed at $150. Still no rent and cash logistics are assumed.
Calculation shows that such a script reaches the break-even point in 9 months from the launch and after the investments comeback will bring monthly $705 to its holder.
Script three — “Robocoin / Genesis1”
Ultimately we reached the most expensive Bitcoin ATMs on the market, which look like the standard bank ATM. These Bitcoin machines are normally tooled with large capacity bill acceptors, support two-way operations and many different compliance features.
For the profitability calculation in this category we used: Bitcoin ATM cost is assumed at $15,000, 1% license fee has to be paid from all operations, number of transactions per month — one hundred fifty (there are additionally sell operations), average transaction size — $300 (sell operations are normally fatter than buy operations), location monthly rent — $200, cash logistics — $300 per month.
Calculation shows that the investment will be returned in 1 year and one month and then one unit will bring to the possessor $1,165 of net cash flow monthly.
This screenplay is taking into account the assumed average parameters for the Bitcoin ATM operation metrics, in particular cases the volume of transactions may be higher and the calculated comeback on investment is different. For example, the very first Bitcoin ATM in Vancouver became profitable in less than a month period (see practical examples).
You can loosely use the Bitcoin ATM profitability calculator and create your own calculation scripts.