For the spoiled ATM culture accustomed to immediate gratification, exchanging cryptocurrencies is a time-consuming headache. Before the launch of cryptocurrency ATMs, digital money users had few other options since traditional banks and exchanges do not distribute the digital currency.
Yet with less than 2,000 crypto ATMs sprinkled across the globe, many cryptocurrency traders are still running around the crypto exchange world fully exposed, or naked in the trading parlance. A naked trader is unable to hedge his trading position to reduce risk. Liquidity risk or a low number of trading counterparties is the largest source of risk on crypto exchanges. Low liquidity means prices can fluctuate greatly by the time a counterparty agrees to the trade. Exchanges are only beginning to introduce traditional risk management instruments such as futures and options to hedge these exposures.
How to spend it
For those who want to convert cryptocurrencies to cash and spend it in the everyday world of commerce, crypto ATMs provide a fast and convenient solution. ‘Bitcoin’ kiosks allow users to exchange between fiat and cryptocurrencies using the familiar ATM interface. The two main types of crypto ATM services are the one-way buy trade of cryptocurrency (transferred to a crypto wallet) using fiat currencies and two-way machines providing the additional option of trading cryptocurrency for cash.
Currently, over 1,900 Bitcoin ATMs are installed worldwide, according to Coinatmradar.com. The number of crypto ATMs has tripled in two years, reflecting the high and rapidly growing demand to conduct trade in cryptocurrencies.
But cryptocurrency ATMs also have their shortcomings. The leading vendors charge high and rising fees. The average ATM fees to buy Bitcoin have risen from six percent in 2014 to 7.5 percent in 2016, finds Coinatmradar.com. Average US transaction fees, where the majority of ATMs are located, have been reported to be 16 percent (Wikipedia ‘Bitcoin ATM’). Cointed, the leading crypto ATM operator in Europe, is one ATM vendor helping consumers spend cryptocurrencies in the real world by providing ATM fees competitive with banking ATM fees. Fees average 2.5 – 4.5% to buy Bitcoin and 1 – 3% to sell at Cointed’s portable digital money dispenser. For users who do not yet have a cryptocurrency wallet, the Cointed ATM will create a paper wallet.
High exchange rates are still an issue though. Crypto ATMs eliminate counterparty risk but do not protect crypto traders from exchange rates. Different from traditional bank ATMs, crypto ATMs are backed by cryptocurrency exchanges. The more liquid the exchange, the more likely a trader is to receive a competitive exchange rate. Cointed has over 15,000 participants in its exchange who trade across crypto and fiat currencies.
Crypto moves into banking services
As the market value of cryptocurrency surpasses the $300 bln mark, demand is building for more solutions to help consumers spend it in the real economy. With its ATM machines at the doorstep of global commerce, Cointed is developing other POS technology solutions for cryptocurrencies. In addition to 70 ATM locations in four European countries, Cointed is developing platforms to accept cryptocurrencies in online shops and bricks-and-mortar cash register systems. The Cointed Crypto Debit Card will be available at the end of 2017. Cardholders receive lower fees at Cointed ATMs, are able to do money transfers with others in the Cointed Network, and are eligible to apply for loans in cryptocurrencies. Currencies can be exchanged through the Cointed exchange. An advantage of crypto exchanges is the ability to immediately upload funds and trade, disintermediating traditional transaction processors, and their fees and time delays.
Similar to the trend in crypto exchanges, some crypto ATMs are moving towards a regulated model. Cointed has applied for a bank license. Falling under the purview of banking authorities and their deposit insurance and capital requirement regulations will truly legitimize cryptocurrencies in the commercial world.
Cointed has embarked on a global expansion with inroads into Southeast Asian markets. A green cryptocurrency mining business is helping to fund the growth of its ATM and POS solutions. Cointed solves a major cost issue—mining Bitcoins requires a lot of energy. Cointed’s mining operations use renewable hydro and wind power.
The Cointed Token (CTD) Sale
In an ICO market with mostly pre-revenue companies, Cointed provides an opportunity to invest in a profitable cryptocurrency business—its crypto exchange, mining and ATM businesses are all profitable. A total of 650 mln CTDs are being sold through the ICO, which runs from November 2017 to February 28, 2018. Participants who buy a minimum of 20 ETH receive a free Cointed Limited Card. Those who buy CTDs from December 7 to 14, 2017 will be eligible to win one of five Cointed debit cards. The chance of winning is weighted by the amount invested. Cointed coins can be bought with Ethereum from an Ethereum wallet.
Cointed just held a crypto debit card giveaway via CoinStaker. Make sure to check their latest Bitcoin News to find out who the lucky winners are and also for any other upcoming giveaways for Christmas.