Liquidity Suitable For A Bitcoin ATM

March 21st, 2018

Many different approaches can be taken for a suitable operation of a Bitcoin ATM. Generally, if the same company is operating several Bitcoin ATM machines, they share a pool of liquidity both as a hot wallet, as well as in an exchange. This effectively helps in reducing the number of funds to be frozen in liquidity necessary for running a smooth operation. The Bitcoin ATM in Columbus, OH business is growing, and many investors are buying chains of BTM kiosks. Based on proportion, many operators reported the distribution of liquidity funds in between 50/50 to 80/20 ratio.

Liquidity Funds

Liquidity funds necessary for a smooth operation of Bitcoin ATM machines depends on the volume of the machine. On average, a volume of around $30K per month has $10 to 15 in both BTC, as well as fiat, locked when operating on one Bitcoin ATM in Columbus, OH machine. If the volume is around $60K per month you need to have higher funds for the volume to run smoothly. Operations are not spread consistently with high size sales or purchases over a short period of time and liquidity funds need to cover all these cases, so that the digital wallet is never running out of Bitcoins and customers are not complaining about the Bitcoin ATM machine.

When an operator has several Bitcoin ATM in Columbus, OH machines, the chance of peak volume is averaged around many machines and the overall turnover of funds become stable.

Understanding the Calculation

For instance,when running 10 Bitcoin ATMs in Columbus, OH with around 30K average volume, each requires a deposit and cash collection each weak, necessary liquidity for such poll of machines is around 30*10/4*1.3 ~$100K. If you are distributing the funds in the ratio 70/30, there should be around $30K, and the remaining $70K should be held on the exchange.

When there is a whole network of Bitcoin ATM in Columbus, OH machines and all are funded from the same source, the requirement for every machine may be lower due to the pool of machine transactions which make the distribution of peaks even. The operator may also reduce the liquidity size necessity by increasing the cash flow cycle speed. For instance, depositing as well as making wire transfers to exchange more often, but there is minimum necessary time for this process. Collection and deposits generally take up to one day to get funds in the bank account-internal transfers it may take up to 3 days. Apart from that, there can be delays on the exchange side. Many operators reported that this cycle, for them, normally takes about a week.

This is another useful thing that needs to be considered when you are planning to start a Bitcoin ATM business. There are various areas to consider and all these needs to be taken into account before entering into this venture. A Bitcoin ATM in Columbus, OH business is profitable when you invest properly considering all points.

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