This is the year of the Bitcoin ATM in Santa Fe.
Bitcoin, a cryptocurrency, is still a hazy concept for many. But all of a sudden Santa Fe has at least 18 Bitcoin ATMs, where you can buy and sell the online currency. Most were installed June 30 at Allsup’s convenience stores.
Unlike standardized government currencies, Bitcoin is an anonymous, decentralized currency with no need for a third party like a financial institution. It is a digital currency with computers keeping track of transactions, said Reilly S. White, associate professor of finance at the University of New Mexico, who has published two recent articles on cryptocurrency.
White said some 5,000 cryptocurrencies worldwide amount to $1.3 trillion, with Bitcoin’s cumulative value estimated at $602 billion. He added the average user’s “wallet” is filled with about $8,000 in Bitcoin.
The arrival of Bitcoin ATMs at the street level, White said, means cryptocurrency is becoming part of the public consciousness.
“The ATM increases accessibility and visibility of the business,” White said. “It makes it easy for the average person to be exposed to and buy cryptocurrency. A separate question is, does it make sense to do so or not? It is uncertain if it makes sense right now to invest in cryptocurrency. I can’t come out and say it will be zero or $500,000. Because the market is so volatile, we don’t know yet.”
Santa Fe got its first Bitcoin ATM around October 2020, but the devices have been cropping up in other cities for the past six or seven years.
As recently as 2015, the only Bitcoin ATM that Michael Garfield could find in Austin, Texas, was at a gun shop. He bought about six Bitcoin when each was worth about $700. Now one Bitcoin is valued at more than $30,000, and the rate is posted in real time on the ATMs.
Bitcoin transactions involve slips of paper and online passport-protected accounts. Some people have lost sizable amounts in cryptocurrency because they forgot their passwords, while others such as Garfield have lost their ATM slips.
A much bigger regret for Garfield was selling five Bitcoins for rent and music production software.
“I live with the sting with the cryptocurrency I sold in 2016, now worth a half-million dollars,” said Garfield, a social media strategist and podcast producer at the Santa Fe Institute.
Bitcoin and dozens of other cryptocurrencies have tried to go more mainstream in recent years after spending nearly a decade on the fringe of the internet. The ATM has been a way to do that, allowing people to deposit coins in exchange for a virtual currency — typically, a tiny fraction of a Bitcoin or many other cryptocurrencies.
One company, Coin Cloud, installed its 2,000th Bitcoin ATM at the end of June and has nine at Allsup’s convenience stores in Santa Fe. Coinme has outfitted 7,000 Coinstar machines with Bitcoin ATM technology, including Coinstar ATMs at Santa Fe’s Albertsons/Market Street stores and the Smith’s Food & Drug on Cerrillos Road.
“Some people don’t even have bank accounts,” Coinme spokeswoman Delia Mendoza said. “This is a solution for those people.”
About 15 people have done transactions at the Bitcoin ATM installed in mid-June at New Method Dry Cleaners on St. Michael’s Drive, including owner Laurence Romero. He said some people come in just to use the Bitcoin ATM, but a few have become new dry cleaning customers.
“Coin Cloud contacted me,” Romero said. “They pay rent to be in the space. I’ve bought some Bitcoin. I can watch [the rate] go up and down every day. It’s just like an investment. I looked them up online. They are legitimate.”
The Bitcoin concept was introduced in 2008 by an entity that goes by the name Satoshi Nakamoto — a still-unidentified person or group of people. A limit of 21 million Bitcoins was set. So far, more than 18 million Bitcoins are in circulation, with each now worth about $32,000 after floating around $500 as recently as 2016.
Bitcoin remains the biggest player in the cryptocurrency arena, amounting to about half the cryptocurrency market, but the Bitcoin ATMs offer about 30 different cryptocurrencies.
Bitcoin was created to be a peer-to-peer electronic transaction system — to buy things from people who accept Bitcoin. But Bitcoin has evolved to be predominantly an investment, as the value of a Bitcoin has rocketed from 6 cents in 2010 to about $300 in 2015 to $63,000 earlier this year. Some predict Bitcoin could reach as much as $500,000 by 2030.
“I wouldn’t buy anything personally with my Bitcoin, maybe never. It’s an asset,” said Renae Moreschini, a dentist and owner of Ahh Dental in Santa Fe.
She started accepting Bitcoin as payment about six months ago — around the same time she started buying the cryptocurrency Ethereum — but no patient of hers has used cryptocurrency to pay their dental bill, Moreschini said. She hasn’t publicized or put up signage to announce that Ahh Dental accepts Bitcoin, primary because like so many businesses she is extremely short-staffed.
Moreschini has known about Bitcoin since 2012 but didn’t study it closely until the pandemic lockdown a year ago when she had time on her hands.
“I watched MIT lectures on YouTube,” Moreschini said. “After getting all that information, it was a no-brainer for me. There’s a lot of people having issues giving each other currency in different parts of the world. We need to try and figure out ways to have more freedom with financial transactions.”
Moreschini doesn’t plan to use a Bitcoin ATM because she does her cryptocurrency dealings via the Coinbase Pro app.
“I think they are good,” she said of the ATMs. “It’s good for people who are traveling and just want to transfer money from other parts of the world.”
Garfield, the Santa Fe social media strategist, said he no longer uses an ATM because he does his cryptocurrency transactions with the app.
“I don’t know who uses [Bitcoin] ATMs anymore,” he said. “I think those cases are people familiar with ATMs and unfamiliar with apps. My sense is if you want to buy in, it’s a reasonable way to do that. But you pay a fee. If somebody is comfortable using apps, it’s easier than ever to do that.”
Daniel Sandoval, owner of AppleCore in Santa Fe, started buying Bitcoin in 2014 for $11 per month, which he continues to do today. He accepts Bitcoin as payment but said customers don’t use cryptocurrency to buy his products.
“Nobody wants to pay with Bitcoin because it’s like gold,” Sandoval said. “I actually own quite a bit of Bitcoin, more than one Bitcoin. I am educating people. My whole goal in 2014 was to acquire as much Bitcoin as I could. There is a lot of people who made money. But a lot of people lost a lot of money. I’m neither. I figured out it’s a long-term play. I think I found the best way to do it. You buy $11 a month.”
Sandoval is wary of Bitcoin ATMs because holdings are tied to a paper receipt.
“It’s very important to secure it in a right way,” Sandoval said.
White, the UNM professor, said the pandemic has inspired large institutions to make significant Bitcoin purchases, including Tesla and many investment firms as well as numerous reports that Walmart is considering a huge purchase.
As recently as 2020, the Bitcoin price was as low as $7,000 and this April it soared to $63,000. Volatility has been a hallmark for Bitcoin from the start.
But Garfield believes the volatility is flattening with public and institutional interest in Bitcoin.
“A lot more people are jumping in,” Garfield said. “Because so many players are in the game, the volatility has been dampened. The risk and gain has diminished. There is downward pressure because there is so much institutional interest.”
Still, White warned, buyer beware.
“Do your research on it before you buy,” White said. “Do research as you do with anything you buy. That’s really money you are giving up. Those values can go down all the way as well as go up.”