Bitcoin ATMs Becoming Increasingly Commonplace in U.S. State of Michigan
Even though bitcoin is going through a bear phase along with the rest of the cryptocurrency market, their ATMs are increasing in number. According to Statista, the number of bitcoin ATMs has grown from a mere 500 in January 2016 to over 2500 in April 2018. The majority of these ATMs have been set up in places where the average per capita income is below the national average.
Growing Number of Bitcoin ATMs in Detroit
Detroit is the largest city in the midwestern state of Michigan and has an estimated population of 673,000. Once the hub of automobile manufacturing, the city has seen its population decline in recent times due to its struggling economy. However, it seems as if bitcoin has brought in a new wave of optimism to the city. Bitcoin ATMs can now be seen at local gas stations and nearby stores.
There has also been a tremendous rise in the number of bitcoin ATMs in other parts of Michigan State. Nevertheless, data from Coinatmradar shows that there are around 80 such ATMs in Detroit alone, while the rest of Michigan is home to only 12. Most people using these machines are believed not to have access to traditional banking.
As a result, they are using bitcoin as a means to temporarily store their money instead. Bitcoin ATM providers are also targeting lesser affluent areas to set up their machines. After all, households with low incomes are the ones making more use of such machines.
Bitcoin ATM functionality
A bitcoin ATM can only be used to buy cryptocurrency by depositing fiat currency into the machine. Users first enter their wallet address into the ATM by scanning a QR code. Next, fiat currency is deposited into the machine and the equivalent amount of bitcoin is transferred by the ATM operating company to the user’s digital wallet.
Bitcoin as Speculative Investment
Although some households are using bitcoin only to temporarily store money, they are also hopeful of making a quick profit. Bitcoin prices peaked at around $20,000 in early 2018 but have since corrected to $5,906 as of June 30, 2018. While bitcoin has historically given positive returns on a YTD basis, investors who bought the digital currency near its all-time high price are currently in the negative.
John Sedunov, assistant professor of finance for Villanova University in Pennsylvania said, “People may be viewing Bitcoin as a lottery ticket in and of itself and it does seem that they (bitcoin ATMs) are starting to pop up more and more in lower income areas.” The increase in number of bitcoin ATMs is directly proportional to the interest shown by residents towards bitcoin as an high return yielding investment.