What Is a Bitcoin ATM and How Does It Work?

A Bitcoin ATM is a kiosk that allows you to buy and, for certain, sell Bitcoin utilizing cash or a debit card. Not an ordinary ATM, it does not connect to your bank account. Instead, it will send the purchasing bitcoins directly to your crypto wallet.

Currently, more than 38,000 Bitcoin ATMs are worldwide, with the bulk located in the U.S. They are popular amongst people wishing to buy Bitcoin quickly using cash and not having to open an account on any exchange or wait for a bank transfer to go through.

There’s a price to that convenience, however. Bitcoin ATM’s charge very high fees in comparison to online Bitcoin exchanges, often significantly higher fees. This Bitcoin ATM guide covers how they work, the real-world costs, their security, and when it is more advantageous to buy bitcoin elsewhere.

Key Takeaways

• A Bitcoin ATM is a kiosk you can use to purchase or (some machines will allow you to sell) Bitcoin without a bank account, using cash or debit card.
• They usually charge 6-20% of sales or purchases – in comparison with the under-1.5% fees found on online exchanges!
• There are two components to the total cost: a transaction fee and a hidden spread that is incorporated into the rate that is displayed.
• Typically, a $500 to $25,000 day limit for purchases is applied per operator and identity verification completed.
• Bitcoin ATMs are usually the ones that fall prey to scams, and the FTC reported that Bitcoin ATM scam losses have already reached an all-time high of over $110 million in 2023.
• A machine exchange is nearly always cheaper than physically take one than an exchange online, unless you are buying a regular size machine or a large machine.

A Brief History

The first Bitcoin ATM was erected in a coffee shop in Vancouver in 2013, a novelty at the time due to the inclusion of Bitcoin being not well known outside the tech and finance world at the time. The growth was fairly slow for the initial couple of years, but took a dramatic turn for the better once Bitcoin’s price and popularity rose. The network grew to more than 38,000 machines, most of which were in North America, in 2025.

There have been some hiccups during this growth spurt. In response to the growing losses due to scams, several U.There has been a proposal from S states to cap fees and increased verification requirements, and at least one large-player, Bitcoin Depot, has been subjected to harsh financial and legal penalties for the fraud that has taken place on their platform. It’s a fairly new industry and the regulation has yet to keep up.

What Is a Bitcoin ATM?

A Bitcoin ATM is like a machine which converts cash (or a debit card) into Bitcoin and deposits it in a digital wallet, instead of a physical wallet.

The machine won’t impact your banking account in any way. No association with the checking account, routing number or regular banking association. You invest money into the machine, the machine calculates the quantity of bitcoins you’ll receive for that investment, based on the rate of the time, and it sends the coins to a wallet address you provide it.

CoinFlip, Bitcoin Depot, Coinme, Coinhub, and LibertyX are some of the top Bitcoin ATM providers. They have their own dedicated networks in retail stores (convenience stores, gas stations and shopping centres).

Types of Bitcoin ATMs

There are two types of Bitcoin ATMs.

The most popular of these is buy-only machines. They can be used to purchase bitcoins using cash or card, you can’t sell bitcoins back to them.

Bidirectional ATMs are able to be used for both purchases and sales. Either you can put in cash to buy some Bitcoins, or you can move Bitcoins from your wallet to obtain cash back. Not always offered and depends upon location.

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How Does a Bitcoin ATM Work? (Step by Step)

The process all Bitcoin ATM operators go through is similar when using a Bitcoin ATM, but may differ in the specifics depending on the Bitcoin ATM.

Step 1: Firstly, you need to create a crypto wallet. The Bitcoins will be needed to be stored. It may be an application of the mobile phone, a physical wallet or an account of the trading platform with a wallet for depositing Bitcoin.

Step 2: Do the necessary identity verification (if applicable). Depending on the amount and machine, a phone number might be required for SMS verification or a government ID might need to be scanned or a selfie taken for verification. This is usually not a part of smaller transactions but will be required in larger transactions.

Step 3: Click the type of transaction button. Make a trade that is to purchase bitcoin or (on 2-way machines) sell bitcoin.

Step 4: Deposit money or debit/credit card. One by one put the bills into the machine (most Bitcoin ATMs will only accept cash, some will accept debit cards). As you scroll down you will also be able to see how much bitcoins you’ll earn as well as your total amount of bitcoins won.

Step 5: Scan / Enter wallet address. The majority of people use the machine’s camera to scan their wallet’s QR code. If it’s needed, you can type in the address.

Step 6: Double check and recoup your bitcoins. Once you’ve confirmed the transaction, the machine will then move the bitcoins to your wallet. This should take a few minutes, but may take more time if the network is busy.

Step 7: If it is feasible, sell the bitcoins. If it’s a bidirectional machine then you would have to put Bitcoins in your wallet, after it’s been confirmed, and take cash out of the machine. 

Bitcoin ATM Fees Explained

The information about Bitcoin ATM fees that you must know.

What most new users are taken aback by. Bitcoin ATM fees are significantly higher than the fees charged by the online exchanges and it is not a mere trifle.

There is a wide variation in fees from operator to operator. LibertyX states that they charge an 8% buy fee (which is a ‘flat fee’). A couple of those are closer to 10-25% running, namely Coinme. The median is about 16% of the transaction value, according to data cited by the Federal Reserve Bank of Kansas City, for the industry as a whole.

This is a map of revenues collected by state agencies and/or programs.

The Bitcoin ATM owner is not able to make out of this existence cash and coins using the Bitcoin ATM fee. There are usually two components to the total costs:

The percentage that a merchant actually charges during the transaction is the percentage that’s up front or visible, and is called the transaction fee. Before confirming, it’s definitely displayed on the machine’s display.

The separation between them isn’t as defined. The ATM’s price minus the live market price of Bitcoin. Spread is the difference between the exchange rate of Bitcoin on the Bitcoin exchange and the rate offered by the machine. If the price of Bitcoin on the Bitcoin exchange is $60,000, and the price displayed on the machine is $63,000, then the spread is $3,000 or 5%.

The two fees (which vary depending on the bitcoin machine and location) cost a total of $75-$87 to buy $100 worth of bitcoin. 

Fees by Operator

The large Bitcoin ATM networks have considerably varying published fees. The following are general ranges and actual rates will differ depending on the size and location of the transaction and operators reserve the right to change rates.

For example, while it’s important to compare the actual rate and the rate that’s displayed on the machine screen with the current market rate, the published averages do not necessarily represent what that machine in your vicinity will be priced at.

A Worked Example

How much BTC will you get if you invest $500 in a Bitcoin ATM with a total fee of 16%?How many BTC will you receive back for an investment of $500 in a Bitcoin ATM that charges an overall fee of 16%? This amount of bitcoin would be equivalent to $420 USD that you would be left with. Assuming the above fees, the person may receive approximately $493 worth of bitcoins for a $500 investment in a lower fee online platform. It’s $73 difference on just one trade, and can accumulate over time if you are trading Bitcoin every day.

The operators say that this cost is justified because it is due to the physical equipment required ($5000-$15000 per machine), cash in transit, state money transmitter licenses and the high cost of compliance associated with anti-money laundering measures which can cost mid-size operators hundreds of thousands of dollars annually. 

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Bitcoin ATM transaction limits

Transaction limits are subject to the operator’s, location’s and identity verification’s level.

• A typical daily amount is between $500 and $25,000.
• Some machines can set the limit as low as $100 per transaction.
• Usually, a scanned government ID is needed for higher limits and in some cases, facial verification via a selfie is required.
• For most operators, purchases of $2,000 or more typically result in a required ID check.

If you are thinking about purchasing a larger machine, calling ahead and/or checking the operator’s application is prudent to verify any machine’s restrictions before arriving with cash in hand.

Regulation and Compliance

As such, in the U.S. the owners of bitcoin ATMs are regarded as money service businesses and are mandated by FinCEN to register as such. They also are licensed as money transmitters by most of the states in which they operate. That is, they may be required to adhere to the requirements of the Bank Secrecy Act that impose on traditional banks the responsibilities like transaction monitoring and suspicious activity reporting, among others, which is basically the same.

Compliance costs have been estimated to be anywhere from $500,000 to $2 million per year for mid-size operators who face those costs as a result of having compliance monitoring software and compliance personnel and all the paperwork associated with anti-money laundering regulations. Among other factors that contribute to why the fees charged are higher than those charged by online exchanges, is the issue of cost.

Regulation, too, is becoming an issue as a result of loss in scams. Some states have imposed or are planning to impose consumer-protection regulation in terms of how the BATMs operate including the fact that the screens should display warnings prior to transactions and transactions should not exceed some amount. Some initial indications of what regulation means in terms of BATMs: in at least one state the imposition of stricter fee limits led operators to take out hundreds of machines from circulation.

Where to Find a Bitcoin ATM Near You

The most comprehensive Bitcoin ATM finder is CoinATMRadar, which provides up-to-the-minute information on the availability of ATMs, their fees, and their operators in locations all across the globe.

Bitcoin ATMs are often found in:

• Convenience stores and gas stations
• Shopping malls, retail centres
• Grocery stores
• Restaurants and bars
• Hotels and travel centers.

Geographic coverage is heavily weighted towards urban areas. In the U.S., the highest number of machines are found in Texas, California and Florida, and rural areas may have little access to machines. Most machines are available 24/7, but depending on the host business, you may be restricted as to when you can actually access a machine.

Is Bitcoin ATM Safe?

Bitcoin ATMs are safe to use when the operator of the machine is a legitimate and regulated one. They are encrypted networks, and they will require money wallet verification before sending money, and they honor federal money transmission laws.

But it’s not the machine that poses the greatest risk; it’s how scammers use Bitcoin ATMs as a payment channel. Common patterns include:

• Any calls or texts that are not solicited and state they are from a government agency, that are asking for Bitcoin payment in order to “resolve” some made-up issue
• Scams in which a contact on the internet eventually requests a cryptocurrency transfer (Romance Scams)
• Scam calls that claim a computer is infected with a virus and that you must pay for using Bitcoin ATM.
• The investment schemes that offer you a guaranteed profit when you send bitcoins to a particular wallet.

Most of them can be easily understood – no government body or any legit organization would ever ask you to make the payment using bitcoin atms. Irrespective of however good the story appears to be, if anyone asks you to do this, it is a fraud.

Normally, it should be used to transfer bitcoins to people you know personally. Only use the machine which you know about if you have confirmed the identity of the operator through its official website, and do not heed any payment request which seems to be unexpected, especially when it is urgent.

Moreover, it helps to check the physical security of a machine before usage, especially at the less crowded areas. One of the warning signs for Paylinx as well as Microgaming operator is that there is card skimmer fitted on top of the electronic card reader or that the keypad is loose. It is better to spend one minute in searching before you go to the unknown kiosk.

Bitcoin ATM vs. Buying Bitcoin Online

Given the fees difference, it is vital to understand when the Bitcoin ATM is a convenient alternative, or in what cases an online solution is better.

The Bitcoin ATM may be useful in case of a one-time purchase, emergency purchase, or if you do not have a bank account and need to exchange fiat money for BTC, or if you want to exchange physical money for bitcoins right now.

If you need something else, if the volume of your operations is bigger, if you need to make transactions repeatedly, then using an online exchange is always cheaper. The commission for such services as BTCC is significantly lower than any Bitcoin ATM offers, and buying bitcoin through the spot market of the exchange is no exception, because the whole amount of money invested in the deal is used to buy bitcoins and not only a part of it like in the case of an ATM.

Currently, Bitcoin costs about $62.8k according to BTCC’s live rate, however, cryptocurrency rates fluctuate constantly, and prices at the moment of writing of this article will differ when you’ll be reading it. The exact numbers are not indicated; it is just the price they ask on the exchange (minus commission) and not the price that a physical kiosk asks.

If you have some bitcoin and want to purchase more, but cannot afford transaction fees on the exchange, it would definitely pay off to spend a couple of extra minutes comparing all the fees (transaction fee + spread) of an ATM before making a transaction.

There is one more thing to mention concerning the difference in verification requirements. The Bitcoin ATMs do not require account creation for smaller transactions, but they won’t be available for you anymore if you are making purchases of bitcoins regularly, because sooner or later you will pass the ID verification threshold.

Once you have a verified account with an exchange plate you will be better off over any time period you consider, as it is cheaper to do this once than to incur ATM mark up over and over.

To use a Bitcoin ATM, you simply follow certain steps

If you’ve made up your mind to use a Bitcoin ATM, then here’s the “how to” – specific breakdown:

1. Find a machine near you on CoinATMRadar or a particular machine’s app.
2. If you are looking to purchase anything more than a couple hundred dollars, bring a government issued ID.
3. Keep your wallet app open and ready to show, with its receiving QR code.
4. Place the coins into the machine; watch the machine display the running total as you put coins in.
5. Have your wallet address checked and verify the transaction
6. Hold the receipt or text until you can be sure the Bitcoin has been deposited in your wallet.

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FAQs

Is Bitcoin ATM safe?

Bitcoin ATMs run by trustworthy and authorized businesses are normally safe since they utilize encrypted connections and wallet confirmation. It isn’t the Bitcoin ATM scams that pose the greatest risk, but the scammers who are targeting victims to pay using the ATM. Don’t send bitcoins to a stranger or to someone who asks for an urgent payment request.

Are Bitcoin ATMs ID required?

Most do for larger transactions, particularly. Depending on the amount of money being used, verification items are as low as a phone number for sending SMS messages on a small purchase, and as high as a government identification card and selfie on purchases exceeding about $2,000. Specific thresholds will depend on the operator.

What is the cost of Bitcoin ATM?

The typical fee on the buy side is 6% to 20% of the transaction plus network fees of $3 to $10, while the fee on the sell side is 5% to 15% of the transaction plus network fees of $3 to $10. Some operators offer a flat fee of around 8% with others in the neighborhood of 20% or more when spread is taken into consideration.

Is it possible to get some cash from a Bitcoin ATM?

Yes but only from bidirectional machines which can sell. You deposit your Bitcoin into the machine’s address; once the Bitcoin deposit is confirmed, you can pick up the money! Not all Bitcoin ATMs have this feature, many are “buy only” ATMs.

What is the highest amount that I can purchase at a Bitcoin ATM?

Normal limits are $25,000 for operators, and $500 for customers depending on your verification level. Some machines impose a limit of up to $100 per transaction and higher limits need to have stronger identity checks performed.

Are the only Bitcoins sold at the Bitcoin ATM?

While the majority of miners are concerned with Bitcoin mining, there are some newer machines that can also mine Ethereum, Litecoin, or other popular cryptocurrencies. Availability is only applicable to particular operators and machines.

Would it be less expensive to purchase Bitcoins online as opposed to at an ATM?

Almost always, yes. Online exchange fees are normally under 1.5%, versus the 6-20%+ fees that Bitcoin ATMs charge that includes the spread. The downside is that there are no conversion rates, meaning that you must open an exchange account first to get cash-to-crypto conversions with an ATM.

Conclusion

The biggest advantage of Bitcoin ATMs is that they address a particular problem – the ability to buy Bitcoin without any bank account or exchange registration. While that certainly is a convenience, it comes at a high cost, which is typically 6-20% or more when you include the transaction fee as well as the hidden spread in the exchange rate.

That trade-off makes sense if you’re looking to shop occasionally, for smaller items or when you have an urgent need. If you are purchasing Bitcoin on a regular basis or on larger scales, an online exchange will almost always be more affordable as you will rarely have to pay a fifth of the transaction, whereas you would be paying lower than 1.5% on an exchange.

Whether you’re using any of the three paths it would be worthwhile to review the fee comparison table above each time you are making a purchase as a quick comparison to the live market price could save you a significant amount of money on any individual purchase. The time it takes to compare the screen price to a live ticker on your cell phone is a minute that cannot be lost and that could make the difference between a fair and an inflated price.

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