The first Bitcoin exchange opened in 2010, and now, there are approximately 600 worldwide. Unfortunately, Bitcoin exchanges create significant barriers for investors who are unbanked, privacy-conscious, or unfamiliar with technology. Bitcoin ATMs have removed these barriers, making investing in cryptocurrency accessible for everyone. Still, there’s a slight learning curve when trying anything for the first time, and you might have some questions about these ATMs. Find out everything you need to know before buying Bitcoin at an ATM.
Digital Wallets and Bitcoin ATMs
When buying Bitcoin at an ATM, or through another method, it is deposited into a digital wallet. Before making your first investment you need to have one of the following types of wallets prepared:
- Non-custodial hot wallet
- Non-custodial cold wallet
- Custodial hot wallet
- Custodial cold wallet
Cryptocurrency exchanges and other third parties manage custodial (hosted) wallets, while investors fully control their non-custodial wallets. These wallets can be hot or cold, based on the internet connection.
Hot wallets are always online and accessible through mobile apps and websites. Cold wallets can connect to the internet when making transactions but remain offline otherwise. Most often, cold wallets are pieces of hardware, such as USB drives.
Non-custodial cold wallets are the most secure but least user-friendly of the options. Investors can blend ease of use with security by using a custodial or non-custodial hot wallet at the Bitcoin ATM and then transferring the funds into a non-custodial cold wallet.
You can also use a cold wallet at the Bitcoin ATM, which requires an additional step. You’ll need to connect the wallet to the internet to obtain the Bitcoin address or a QR code to use at the ATM. By doing this before going to the machine, you won’t have related issues depositing Bitcoin.
Identity Verification at Bitcoin ATMs
When serving investors, Bitcoin ATM operators and exchanges must comply with Know Your Customer (KYC) and anti-money laundering (AML) regulations. Even so, the identity verification requirements are less stringent when using a Bitcoin ATM instead of an exchange.
Many exchanges require extensive documentation before completing a single transaction, even when making a small investment. Bitcoin ATMs typically only require names, email addresses, and phone verification for smaller transactions. Some Bitcoin ATM operators allow investors to purchase less than $1,000 with just this information, while others allow for purchases around $3,000.
How to Increase Limits at Bitcoin ATMs
Bitcoin ATMs have limits, but you may be able to increase the amount of the investment by providing more information. Depending on how much you want to purchase, you may need to provide some or all of the following:
- Date of birth
- Social Security Number
- Occupation
- Address
- Annual income
- Net worth
- Source of funds
- Proof of funds
Because of the increased regulatory requirements, getting approved for amounts higher than $9,000 may take up to a day. Check the operator’s requirements to determine if you need to wait for approval or can invest immediately.
Bitcoin ATM Transaction Fees
Bitcoin exchanges and ATMs both charge transaction fees. The amount varies by Bitcoin ATM provider and may include a percentage of the transaction and a service fee. Bitcoin ATMs deduct the fee from the cash you put into the machine and update the amount of Bitcoin you purchase accordingly. For example, if you insert $500 and pay a fee of 6%, the machine will deduct $30 from the transaction. That means you’ll receive $470 worth of Bitcoin.
Receive the Full Investment
Bitcoin prices can go up and down every second, creating stress when buying on an exchange. You can agree to purchase a specific amount of Bitcoin on the exchange, only for it to change before the transaction goes through. This can leave you with less Bitcoin than expected when using an exchange.
Bitcoin ATMs aren’t subject to the volatile exchange, allowing you to lock in the amount of Bitcoin you’ll receive. You’ll receive the full amount of the investment minus the associated fees.
Paying for Bitcoin
Bitcoin ATMs may resemble traditional ATMs, but they accept cash instead of dispensing it. You’ll need to bring the money you want to invest with you to the ATM to complete the transaction. As with any ATM, it’s helpful to straighten the bills before arriving to prevent any issues when feeding the money into the machine.
Find a CoinMover Bitcoin ATM Near You
CoinMover has over 200 Bitcoin ATMs located throughout the country. With their Bitcoin ATMs, you can invest up to $2,995 daily by providing your name, email address, kiosk photo, and phone number, or increase your limit by undergoing additional verification. They have live customer service available without bots or long wait times. Find a CoinMover ATM near you and use the code WEB20 for your first investment. This code takes 20% off the rate markup when using a CoinMover ATM for the first time.