Rather than crumbling, the industry decided to make lemonade out of lemons. In the face of slow adoption, many cryptocurrency enthusiasts turned their attention to working on new projects, marking the onset of organic technological growth and development in the cryptocurrency sector.
One of the most notable projects to arise from this period of development is Bitcoin ATMs (BTMs), which are designed to grant broader physical access to Bitcoin and several other cryptocurrencies. Bitcoin Depot's recent spree of BTM additions around the country is indicative of a far-reaching BTM expansion in 2019.
In fact, the number of BTMs doubled from January 2018 to January 2019. And Bitcoin Depot's recent initiative in Chicago made headlines as the company added 30 new machines in the city, securing Chicago as the second largest BTM host in the country (behind Los Angeles).
"I predict the number of Bitcoin ATMs worldwide will continue to double per year in 2019 and onward," says Bitcoin Depot CEO Brandon Mintz. And much of that growth may begin in Chicago. Here's a closer look at how Bitcoin Depot is planning to increase Bitcoin adoption in the Windy City and leverage those efforts as a launchpad into global markets.
Leveraging an Emerging Bitcoin Base in Chicago
Chicago is a major global financial hub, only second to New York in the United States. The Windy City has also stamped its imprint on the Bitcoin community. It's home to multiple blockchain-based startups (including Bloq, CFX Markets, Coinbase, and ErisX) as well as CME and CBOE options and futures exchanges, the first two exchanges to offer Bitcoin futures. Even while futures trading was sluggish in 2018, both CME and CBOE reported strong growth at the beginning of 2019.
All of this helps explain why Mintz identifies Chicago as a "very niche customer base." And it also explains why Bitcoin Depot is going all-in on the Windy City.
"Our limited time promotion of zero fees at 30+ Bitcoin Depot ATMs throughout Chicago should spark major adoption of cryptocurrency, as there is currently no other service in the world I'm aware of that can beat our rates in the Chicago market," Mintz says.
Chicago also offers some advantages over its financial rival, New York. The Big Apple's controversial BitLicense is generally viewed as a major barrier to crypto startups residing in the city, and only a handful of companies have been approved for the license so far. Sparring between major cryptocurrency exchange operators and New York regulators has resulted from perceived regulatory overreach.
Mintz and Bitcoin Depot are betting on a more conducive environment to BTM use in Chicago. The company's initiative to offer zero fees on its Chicago-region BTMs is meant to encourage users to take advantage of buying and selling cryptocurrencies at the market price in convenient, community locations.
"Anyone who has been on the fence about buying Bitcoin now has even more of a reason to go try it in Chicago with as little as $20 in cash," Mintz says.
Expanding Global Access to Bitcoin
Bitcoin Depot's efforts to expand its BTM offering across the U.S. coincide with a broader industry emphasis on increasing global access to the legacy cryptocurrency.
Thus far, open access to Bitcoin is one of its weakest assurances, even in "developed" countries and especially in hyperinflationary states such as Venezuela or Argentina, where Bitcoin has become the last resort for salvaging value. Adding BTMs to "developing" countries offers greater Bitcoin access to people who lack access to Internet infrastructure.
"Bitcoin ATMs are the best source of access to cryptocurrency in developing countries, as these countries typically have a larger underbanked population that transacts mostly in cash," Mintz says. "It's likely the disparity in the number of Bitcoin ATMs between developed and developing countries will decrease over time, because many of the use cases for Bitcoin revolve around eliminating a need for central banking."
While BTMs are still in the early stages and are thus concentrated in developed countries such as the U.S. and Canada, the potential market for BTMs is enormous. Mintz and his team have their eyes on ambitious, global goals -- starting with building a BTM audience in one of the largest financial centers in the world.
Chicago seems open to nurturing innovation that will supplement the growth of Bitcoin tools, services, and access in both developed and developing regions. Bitcoin Depot is banking on the Windy City to provide these tools alongside a niche user base that may play a significant role in Bitcoin's global future.