Another type of ATM is appearing in stores, supermarkets, and malls in southwestern Pennsylvania. These, however, are not meant to cough up dollars.
They offer cryptocurrency – a decentralized digital currency that has no government support or regulation. Its value is volatile, fluctuating like a stock. It is mainly based on the amount that investors will pay and speculation on its future value.
Over the past year, dozens of cryptocurrency ATMs have gone live across the region to facilitate the buying and selling of digital cash.
Operators such as American Crypto, Bitcoin Depot, Bitcoin of America, CoinFlip, Freedom Gateway, GetCoins, RockItCoin and others have installed machines in businesses, mostly convenience stores. ATMs are also found at Giant Eagle stores, Ross Park Mall, and Pittsburgh International Airport. Others can be found in Westmoreland County and the Alle-Kiski Valley, in downtown Pittsburgh and Lawrenceville, in Bethel Park and Mount Lebanon.
A competing firm such as Coinstar Asset Holdings of Bellevue, Wash., has had crypto ATMs in the Pittsburgh area since 2019. Atlanta-based Bitcoin Depot has its machines scattered in about 100 businesses across the state. Nationwide, there are approximately 30,200 crypto ATMs, according to ATM Marketplace.
“We’re growing almost every week,” said Neil Bergquist, chief executive of Coinme, the country’s largest licensed cryptocurrency ATM network. The company operates in 48 states, including Pennsylvania, through a system of Coinstar ATMs and kiosks, such as those located at Giant Eagle stores to convert currency into cash, gift cards and, now, cryptocurrency. .
O’Hara-based Giant Eagle turned to Coinstar when it introduced crypto ATMs in 2019, including at a store in North Huntingdon.
“Most of the country is crypto curious,” said Bergquist, who estimates that around 15% of Americans own digital currency.
Some 86% of Americans have heard of cryptocurrencies, according to the Pew Research Center. But estimates of how many Americans have invested their money in digital currency — and how many people truly understand it — vary widely.
About 21 million Americans — about 14% of adults nationwide — own a share of the cryptocurrency world, according to Gemini, a cryptocurrency exchange regulated by the New York State Department of Financial Services. Other surveys put the number at over 60 million. Either way, more Americans in the past two years have invested in the crypto market, which comprises around 17,000 options on over 400 exchanges and holds a global value of $1.8 trillion. This followed a crash of more than $500 billion on Friday alone after Russia said it could ban cryptocurrencies. China did the same last fall.
In total, the cryptocurrency market has lost $1.2 trillion in value since Nov. 8, when it topped $3 trillion, according to Bloomberg.
This ties in with longstanding warnings from skeptics such as Steve H. Hanke, a professor of applied economics at Johns Hopkins University in Baltimore.
Investing in cryptocurrency doesn’t make sense for any transaction size, he said.
“It’s very similar to going to Vegas and rolling the dice,” said Hanke, one of the world’s leading experts on hyperinflation. Without a balance sheet or assets to generate cash flow, “the highly speculative asset has a fundamental value of zero.”
Whales, the name given to investors who own large amounts of cryptocurrency, “manipulate the market,” Hanke said.
On Friday alone, some $700 million worth of cryptocurrency was liquidated globally.
The rise and fall of crypto
Cryptocurrency was born out of the fallout from the global economic crisis of 2008.
At a time when the unemployed and disenfranchised were protesting established financial systems, this new currency promised a form of digital currency that would be proof against banking regulations and government control.
The currency – a creation of digital code, although some physical coins have been developed – is based on blockchain technology which uses a global computer network to store and update transactions, but not names, addresses or other information. identification.
As the Los Angeles Times recently reported, “every bitcoin began as the payment a person made to themselves for doing the computer-intensive cryptographic work required to record transactions on the blockchain (an activity called ‘mining’). “)”.
Blockchain technology, in essence, burns a publicly available digital record and is touted as eliminating the need for a secret, centralized system. Cryptography is supposed to prevent digital currency from being counterfeited or spent more than once. Like cash, however, it can be lost or stolen.
In 2021, thieves stole a record $14 billion in cryptocurrency worldwide, Chainalysis reported. These losses, due to theft and scams, have increased by around 80% compared to 2020, according to the Singapore-based blockchain analytics firm.
Bitcoin, the most popular cryptocurrency, was created in 2009 by anonymous inventors. In 2010, as the value of Bitcoin rose from 9 cents to $40, a Florida man traded 10,000 units for two pizzas. It would be worth around $384 million today.
On Friday, the value of one bitcoin fell below $40,000, its lowest level in six months.
It still remains the shining star of digital currencies, accounting for almost 40% of the market, according to CoinMarketCap. Bitcoin had an all-time high of over $69,000 in November. At the time, some analysts predicted it could reach a valuation of $100,000.
The second most popular cryptocurrency, Ethereum, is worth less than $3,000, down from a high of nearly $5,000 just 10 weeks ago. It holds just under 20% of the market. Other cryptocurrencies, some of which are worth fractions of cents, account for 3% of the market.
“Most of them won’t survive,” said Kenneth Dupre, a former money manager who is director of trading data analytics at Saint Vincent College near Latrobe.
Hit the main street
Green Tree-based Fort Pitt Capital Group receives questions about investing in cryptocurrency daily, said Carter Henderson, a portfolio manager.
The challenge for investors is volatility, Henderson said. An example of this is the sudden rise and fall in the value of Bitcoin.
For these reasons, Henderson said he advises clients to invest only 1% to 2% of their wealth in crypto. This conservative path gives them exposure to the developing market without putting the majority of their assets at risk.
Henderson said he sees more crypto investors being institutions, which are more willing to take risks and can weather the ups and downs.
But Henderson said he believes in the crypto market.
“One hundred percent,” he said. “Cryptocurrency is here to stay.”
The likelihood of Bitcoin holding its value is higher as the supply has been capped at 21 million – of which around 19 million has been mined.
“Bitcoin is here to stay,” Dupre said. “With a limited supply, it’s like digital gold.”
Plum’s Sheila Reed, an Allegheny Valley School District teacher who previously worked with retirement accounts, is helping connect people who want to invest in crypto with NovaTech, a Caribbean-based company with business expertise on the Marlet. It’s safer, she says, than trying to go it alone.
“A lot of people end up losing money because they don’t know what it’s all about,” Reed said.
Others warn investors to be cautious.
“Don’t put more money into cryptocurrency than you can afford to lose,” said Antony Davies, associate professor of economics at Duquesne University School of Business. In the crypto world, there is the backing of Federal Deposit Insurance Corp. as with money kept in a bank.
Bergquist’s advice: “Buy it and forget it.”
Most of the crypto users of Coinme, which has partnered with Coinstar in its ATM network, are first-time investors. With their meager holdings in virtual wallets, they can use debit or credit cards to turn dollars into cryptocurrency.
Most cryptocurrency owners have invested around $1,000 on average, according to a survey conducted last summer by Finder, an online news platform. The median amount is around $200 in a digital wallet, which securely stores passwords for held cryptocurrencies and makes the currency accessible to send and receive.
Last week, a senior company executive said that Google Pay could become a “complete digital wallet”, including for crypto payments. Online brokerage Robinhood Markets also said it will provide digital wallets to 1,000 customers and expand the offer this year to more than 1.6 million people on its crypto wallet waiting list.
Major companies that use cryptocurrency for purchases include AT&T, Microsoft, Home Depot, PayPal, and Tesla, among others.
Extend reach, if not interest
A Bitcoin Depot ATM sits at the edge of the Westmoreland Shopping Center food court in Hempfield, near the Subway sandwich counter. Shoppers and strollers pass quickly, clutching their bags or doing their rounds. Diners often sit at adjacent tables. Few, if any, give the machine a look.
Katie Gauvain of North Versailles works at the Forever Young Beauty store, which is within sight of the machine. She said, from what she has seen, there is little interest in it.
Despite that, there is a vision for growth, said Connor Alexander, owner of Pittsburgh-based Freedom Gateway. His ATM company has 60 crypto ATMs at stores in Allegheny, Beaver, Erie, Washington, and Westmoreland counties.
“We’ve seen a 150% increase in usage since 2018,” said the Mount Lebanon native, whose company places the machines primarily in small convenience stores.
One is located inside the Jeannette Food Mart on Harrison Avenue.
“People use it from time to time,” said owner Bhuwa Acharwa, who also has a Freedom Gateway ATM at his Trafford store.
Still, Acharwa said he is not yet ready to invest in cryptocurrency.
Bob Ahad, owner of Freeport Corner Grocery in Natrona Heights, said he sees people coming in once a week or every two weeks and acquiring cryptocurrency. His wife tried her hand at crypto, but Ahad said he plans to stay away.
“I don’t have that kind of money,” he said.
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