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Crypto ATMs flood San Antonio

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This is a carousel. Use Next and Previous buttons to navigateThese days, people can buy all sorts of things at local convenience stores: candy, soda, beer, cigarettes — and cryptocurrency via special ATMs.In October 2019, only 31 Bitcoin ATMs dotted the city. Today, 212 of the machines reside in local gas stations, corner markets, and tobacco and liquor stores across the city, according to CoinATMradar.com, a website that tracks digital currency ATMs.The explosive growth of cryptocurrency ATMs in San Antonio, and around the world, is an indicator of the popularity of the highly volatile digital currency, which hit its all-time high value of $41,962 for one bitcoin on Friday.More for youThe unregulated currency has seen a steady rise from September, when a single bitcoin cost around $10,000.But like any high-risk asset, cryptocurrency’s recent bullish gains could disappear as quickly as they came, according to Ashwin Malshe, a marketing professor at the University of Texas at San Antonio and an expert in digital marketing.On ExpressNews.com:“Investing in Bitcoin alone would be a terrible idea, and in particular, for somebody who was investing their hard-earned money, it’s super risky for them,” he said.One problem, he said, is Bitcoin appears to be prone to “classic pump and dump” schemes in which people artificially inflate the price of a security in order to sell at a higher price, and the market is small compared to others.The total valuation of Bitcoin was $740 billion Friday afternoon, according to Coinbase, a cryptocurrency trading website.“If a few of the big players start selling, it immediately affects the pricing,” Malshe said. “The risk that we’re talking about with these assets is really, really high.”Despite the risks, however, cryptocurrency offers several potential benefits to investors, according to Daniel Polotsky, CEO of Coinflip, one of the nation’s largest Bitcoin ATM networks.For one thing, he said, the ATMs give people without traditional bank accounts access to the Bitcoin economy.“I think that the underbanked and the unbanked population of the U.S. — people that don’t trust banks, people that can’t afford banks, people that can’t afford to pay overdraft fees, hidden fees, account fees, all these types of things — still deserve a way to be able to access the crypto economy, and Bitcoin is a level playing field,” he said. “It’s kind of bringing opportunity back for the average Joe.”On ExpressNews.com:Other target users, he said, are those who aren’t tech savvy and/or are a little older who “want a user-friendly process and is a little bit intimidated by the online offerings.”The number of Bitcoin ATMs grew by more than 2½ times across the country in 2020, according to CoinATMradar.com.The machines charge interest rates that vary from zero to 26 percent to buy or sell cryptocurrency. Most ATMs in the U.S. average a 6 percent charge, according to CoinATMradar.com.“We charge 6.99 percent for the buy and 3.99 or 4.99 percent for the sell,” Polotsky said. “And we’re always looking to bring these down.”People create digital wallets on the ATMs through which they can invest in various digital currencies. There are more than 2,400 types of cryptocurrency, according to Coinbase. The most popular are Bitcoin, Ethereum, Tether, XRP and Litecoin.ATM customers deposit their cash and select which cryptocurrency to buy a portion of. They can also sell cryptocurrency through the machines.In addition to Bitcoin, Coinflip ATMs “sell Litecoin (LTC), Ethereum (ETH), Dash (DASH), Binance Coin (BNB), Chainlink (LINK), Stellar (XLM), and USD Coin (USDC) at all ATMs,” and some machines “also buy Litecoin (cash out),” according to their website.Coinflip ATMs have different tiers of deposit limits. Under federal law, customers must provide more personal information for higher-value transactions.Deposits of $900 or less require only the user’s phone number. Up to $2,995 requires a form of identification. For transactions of up to $8,000, customers have to provide their Social Security numbers. Transactions of $12,000 or more require a contract and a second form of identification.Bitcoin is the heavyweight among digital currencies. Its value is five times larger than Ethereum, its nearest competitor.The coronavirus pandemic is one reason more people are turning to cryptocurrency, said Polotsky, whose Chicago-based company operates 1,340 Bitcoin ATMs nationwide, including 18 around San Antonio.On ExpressNews.com:“I think that people definitely want to flock to Bitcoin with things uncertain as the pandemic unfolds,” he said.Polotsky didn’t specify what he meant by uncertainty, but it’s safe to say economic and political turmoil impacts investor behavior.He called Bitcoin “gold 2.0” — but “way more lightweight.”In addition to cryptocurrency, Malshe said, several investment markets, including stocks, are seeing influxes of investors due largely to stimulus checks and people having extra cash from staying home.Some people aren’t eating out, driving as much or going on vacation, so they may be looking to invest more.“I have this as an explanation for why you see this huge influx of individual retail investors into all the risky assets right now,” he said. “Whether this will continue or not is a good question.”Joe Dhukka, owner of Smokerz Paradize smoke shop chain, said he has had Bitcoin ATMs at seven of his nine storefronts in San Antonio for just over a year, and he’s considering putting the machines in his other stores as well.“It’s a way to get more foot traffic,” he said. “It gives me a little bit of extra money.”Polotsky of Coinflip said the company pays business owners rent, offers a profit-share option and provides approximately $3,000 in free marketing to host an ATM.His advice for those looking to invest in crypto: “Only buy what you can afford to lose.”“While I think it’s an amazing invention — many people do — there’s always risk involved, so never over-leverage yourself in one asset class,” he said.Malshe said he wouldn’t recommend investing in cryptocurrency, but he acknowledges it offers a diversification option for investors.“When you are diversifying, you don’t necessarily study each and every asset class in detail,” he said. “You just invest in different asset classes because you didn’t know what is going to happen tomorrow.”One of the ATMs is at Smokerz Paradize on Pat Booker Road in Universal City. The machine, smaller than a cash ATM, is bolted to the ground near the front of the store adjacent to cases full of pipes, hookahs, cigars, vaping goods and cannabidiol products.“On average, about six to 10 different people that come in on a regular basis — they just sit there and deposit money for, like, 30 minutes or so, leave and then sometimes come back a couple hours later and deposit some more,” said Walter Hernandez, the store’s manager. “They’re super into it, the ones that are using it.”The customers usually have stacks of $20 or $100 bills, said Hernandez, who’s worked at the store for two years.Armored trucks pick up the cash nearly every day, he added.The ATM business has steadily picked up over the year.“It was only like one or two people at first, and then it’s slowly been getting more and more and more people, especially as the (bitcoin price) keeps fluctuating,” he said. “When it fluctuates higher there seems to be a frequency of more people coming in trying to get in on it.”Hernandez said some of his co-workers use the machine, but he does not.“I’m more of a savings and bonds kind of person,” he said.Brandon Lingle writes for the Express-News through Report for America, a national service program that places journalists in local newsrooms. ReportforAmerica.org. brandon.lingle@express-news.net

This is a carousel. Use Next and Previous buttons to navigateThese days, people can buy all sorts of things at local convenience stores: candy, soda, beer, cigarettes — and cryptocurrency via special ATMs.In October 2019, only 31 Bitcoin ATMs dotted the city. Today, 212 of the machines reside in local gas stations, corner markets, and tobacco and liquor stores across the city, according to CoinATMradar.com, a website that tracks digital currency ATMs.The explosive growth of cryptocurrency ATMs in San Antonio, and around the world, is an indicator of the popularity of the highly volatile...

Crypto ATMs flood San Antonio

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