Bitcoin Depot has reached a deal with a special-purpose acquisition company that values the cryptocurrency ATM firm at roughly $885 million and would take it public, company officials said.
The merger comes during market downturns for cryptocurrencies and SPACs and is expected to test investor appetite for bitcoin ATMs, which some skeptics associate with crimes and high fees.
Atlanta-based Bitcoin Depot is combining with the SPAC GSR II Meteora Acquisition Corp. in a deal that is set to be unveiled Thursday.
Founded in 2016, Bitcoin Depot says it is the largest provider of bitcoin ATMs in North America, with more than 7,000 kiosks in the U.S. and Canada at stores such as Circle K.
Bitcoin ATMs aren’t like the conventional automated teller machines consumers find at traditional banks that let users withdraw or deposit cash. Instead, they are kiosks where consumers can use cash to buy bitcoin or other digital currencies, often by scanning a QR code.
Proponents say bitcoin ATMs allow more people to access cryptocurrencies because users don’t need to link a credit card or bank account to their digital wallet and can quickly transact at stores or gasoline stations. Bitcoin ATMs can complete transactions in minutes, whereas exchanges that many traders use to swap cryptocurrencies sometimes take days to fulfill orders. There are nearly 40,000 bitcoin ATMs around the world, up from about 6,000 at the end of 2019, according to Coin ATM Radar. Most of them are in the U.S.
Despite the cryptocurrency bear market that has sent bitcoin prices about 70% below their November peak, Bitcoin Depot says it has continued growing. The company had record sales and earnings before interest, taxes, depreciation and amortization in the second quarter, highlighting a growing number of use cases for cryptocurrency such as payments for physical items and sending money overseas, Chief Executive Brandon Mintz said.
“We’re actually doing fantastic right now regardless of the market,” he said. He started the company after struggling to buy bitcoin online. Bitcoin Depot plans to pursue acquisitions after going public. It recently launched a product that lets customers use cash at more than 8,000 stores to buy cryptocurrency using the company’s mobile app without physical kiosks.
Skeptics worry that the ATMs are easy to abuse for crimes such as money laundering. High transaction fees add to worries that they can be used to prey on poor people. Singapore—once one of the friendliest financial hubs to the cryptocurrency industry—banned bitcoin ATMs early this year. The Federal Bureau of Investigation late last year warned of a rise in bitcoin ATM scams.
