Bitcoin Depot, a leading U.S.-based Bitcoin ATM operator and fintech company, has announced plans to allocate a portion of its cash reserves to bitcoin (BTC).
This move underscores the company’s belief in bitcoin as a significant financial asset and a store of value, aligning with the broader trend of institutional adoption of the scarce digital asset.
Bitcoin Depot’s decision to incorporate bitcoin into its treasury strategy is not just a leap of faith but a calculated move supported by recent changes in accounting standards.
The Accounting Standards Update (ASU) 2023-08, effective for fiscal years starting after December 15, 2024, allows companies to record gains held on digital assets.
Related: New FASB Bitcoin Rule Paves Way for Corporate Bitcoin Reserves
This update provides a more favorable regulatory environment for companies like Bitcoin Depot to hold and report digital assets.
Brandon Mintz, CEO of Bitcoin Depot stated:
“We have always believed in providing easy access to Bitcoin for everyone, and this move reaffirms our confidence in Bitcoin’s potential for growth and stability.”
Bitcoin Depot is no stranger to the world of Bitcoin. Since its founding in 2016, the company has grown to become the largest Bitcoin ATM operator in North America, with over 7,400 locations as of April 2024.
The company’s mission is to connect cash users to the broader digital financial system by providing simple, efficient, and intuitive means of converting cash into bitcoin.
In recent months, Bitcoin Depot has celebrated several milestones. The company signed its first partnership with a major grocery chain and launched a profit-sharing program in April 2024.
Additionally, Bitcoin Depot has expanded its reach by surpassing its goal of 8,000 Bitcoin ATM locations ahead of schedule and entering new markets, including Puerto Rico and Australia.
Bitcoin’s journey from a niche digital currency to a mainstream financial asset has been remarkable. Bitcoin has achieved a market capitalization of over $1 trillion.
Institutional adoption has surged, with numerous companies and even countries recognizing Bitcoin’s value proposition. The introduction of Bitcoin ETFs has further legitimized its standing in traditional financial markets, making it more accessible to a wider range of investors.
By including Bitcoin in its treasury strategy, Bitcoin Depot joins other forward-thinking institutions that view the digital asset as a hedge against inflation and a strategic asset for future growth.
This decision places Bitcoin Depot alongside notable companies like MicroStrategy and Metaplanet, which periodically replenish their bitcoin treasury.
However, the path to incorporating bitcoin into its treasury has not been entirely smooth for Bitcoin Depot. Despite its growth and expansion, the company has faced challenges, including diminishing earnings and a falling stock price.
Bitcoin Depot’s stock (BTM) experienced a significant decline in 2023, falling from $10.35 in June to $1.61 by July, even as the overall market recovered in 2024.
One of the reasons for the company’s struggles is the relatively high commissions charged by Bitcoin Depot ATMs, which, despite offering privacy, may deter some users.
Additionally, the company has faced issues related to money laundering through its ATMs, leading to the implementation of daily exchange limits to combat this problem.
Bitcoin Depot has also raised some red flags with recent internal contracts. Kiosk Technicians, LLC, a subsidiary of Bitcoin Depot, entered into an agreement with Lucky Unicorn, LLC, an operator of kiosks owned by Brandon Mintz, CEO of Bitcoin Depot.
According to the agreement, Lucky Unicorn will receive 30% of the net profits generated by the machines, a move seen by some as a way to redirect earnings to a CEO-owned subsidiary.
Despite these controversies, Bitcoin Depot remains focused on its expansion and strategic goals.
The company plans to grow its ATM kiosks by 25% in the coming months, aiming to boost revenues through aggressive expansion. However, the company acknowledges the challenges ahead, especially in tapping into retail interest in new bitcoin purchases.
Bitcoin Depot’s decision to allocate a portion of its cash reserves to bitcoin is seen as a bold move that could potentially revive its fortunes.
By investing in bitcoin, the company aims to benefit from the digital asset’s long-term value growth, especially in light of the recent accounting standards update that allows for recording gains held on digital currencies.
