I Like Bitcoin. I Still Wouldn’t Own a Bitcoin ATM.

Three states banned an entire category of small business in 2026. Indiana went first in March. Tennessee followed on July 1. Minnesota’s ban kicked in on August 1, with every existing machine due out by the end of the year. The business was the bitcoin ATM, and if you had bought a few of them in any of those states in 2025, your “passive income” became a removal bill.

I get asked about bitcoin ATMs because I write about bitcoin and I write about cash-flow businesses, and this sits right where they overlap. So here is my honest take, as someone who thinks bitcoin deserves a place in a long-term portfolio: I would not own a bitcoin ATM. I would run a plain old cash ATM, or I would host someone else’s kiosk and collect rent. Here’s why.

Disclosure: this post has a couple of affiliate links. If you sign up through them, I may earn a commission at no extra cost to you. I only recommend tools I use or would use. I’m not a financial advisor, a lawyer, or your accountant, and this is not financial or legal advice.

The shovel seller’s trap

I’ve written before about the old line when there’s a gold rush, sell the shovel. On paper a bitcoin ATM is the ultimate shovel. You don’t have to predict the price. You just sell access, and the markup is huge: all-in fees and spreads at kiosks commonly run somewhere around 10% to 25% of the purchase. Compare that to a normal ATM, where you earn a flat $3 or so per withdrawal.

Here’s what the shovel analogy misses. The shovel seller in 1849 didn’t need a license from every territory, didn’t have to file reports on his customers, and wasn’t selling shovels to people who were being robbed while they bought them. The bitcoin kiosk operator is doing all three.

What you actually become when you own one

When you own and operate a bitcoin ATM in the US, you are not a vending operator anymore. You are a money transmitter.

• Federally, FinCEN treats kiosk operators as money services businesses. That means registering, writing and running an anti-money-laundering program, checking IDs, keeping records, and filing suspicious activity reports. In August 2025 FinCEN put out a notice aimed specifically at crypto kiosks, calling out operators who were skipping these steps.
• At the state level, most states want a money transmitter license. Those usually come with a surety bond (often tens of thousands to over a million dollars), a net-worth minimum, background checks, and months of review. Per state.
• And then the rules change. California now limits each kiosk customer to $1,000 a day and caps fees at the greater of $5 or 15%. Georgia and Colorado added daily limits. At least six states cap fees in some form. A federal bill has proposed new-user limits too.

Compare that to a cash ATM, where you sign with a processor that already has the bank relationship and your paperwork is mostly about the machine itself. One is a route business. The other is a compliance company that happens to own a few screens.

The part that bothers me most

Here’s the number that settled it for me. The FBI’s report for 2025 counted more than 13,400 complaints involving crypto kiosks and over $388 million in reported losses, up 58% from the year before. More than half of the complaints came from people over 50.

The pattern is ugly and simple: someone calls pretending to be the IRS, the sheriff, the bank’s fraud department, or a grandkid in trouble, and walks the victim to a kiosk to feed in cash. Once it’s sent, it’s gone.

Now think about that as a business owner. Some percentage of your revenue, maybe small, maybe not, would come from exactly those transactions. I don’t want to build my family’s freedom on a machine where my best customer on a given Tuesday might be a scared 78-year-old on the phone with a scammer. That isn’t a legal argument. It’s a values one, and I think it matters. It’s also why Tennessee’s legislature passed its ban without a single vote against, and Indiana’s Senate passed its version unanimously.

Regulatory risk is concentration risk

When I think about investments, I think a lot about what can take me to zero. With index funds, it’s basically the whole economy failing. With a rental, it’s a bad tenant plus a bad market plus a bad loan. With a bitcoin ATM, it’s one bill passing in one legislative session.

Here’s a rough way to see it:

Risk	Cash ATM	Bitcoin ATM you own
Can a law shut the whole thing down?	Very unlikely	Already happened in three states
Licensing before your first dollar	A processor agreement	Federal registration plus state licenses and bonds
Who carries the fraud problem?	Mostly the banks and networks	Increasingly you (refund rules, limits, warnings)
Slow-moving risk	Cash use declining	Fee caps shrinking margins

A cash ATM has a real problem too: people use a little less cash every year. But that’s a slope you can plan around. A ban is a cliff.

What I would do instead

Option 1: Run a normal ATM route

Same venues (convenience stores, bars, gas stations, laundromats), same foot-traffic logic, same route-business rhythm, and you can start with a few thousand dollars and a processor agreement. It’s not glamorous. It earns a surcharge per withdrawal, and the location decides almost everything. I think it’s the better small business for almost everyone who asks me about bitcoin ATMs.

Option 2: Host, don’t operate

If you own a store, big kiosk networks will often pay monthly rent for the square feet, commonly quoted around a few hundred dollars a month, and they carry the licensing and compliance. That’s a reasonable trade if you’re okay with the reputational side. Just read the removal clause, because in a ban state that rent stops overnight.

Option 3: Own the asset, not the kiosk

If what attracted you was bitcoin itself, separate the two decisions. Buying bitcoin through an app costs a fraction of a kiosk markup. I walked through a simple, automatic approach in how to dollar-cost average bitcoin automatically, and services like River make recurring buys straightforward. If you hold an amount you’d hate to lose, moving it to a hardware wallet like a Ledger is worth learning; my walkthrough is in how to store bitcoin safely.

How much? That’s personal, and bitcoin can drop 50% or more and stay down for a long time. I use the approach in the sleep test: own an amount that lets you sleep through a crash. Not financial advice, just how I think about it.

An illustrative tale of two neighbors

Picture two people in the same Midwestern town. This is an illustrative example; both are made up.

Kelly (illustrative) reads that bitcoin ATMs make 15% or more per transaction and decides to buy two. She discovers the license requires a bond she can’t get and months of review, so she partners with a small regional operator who places kiosks under their license and splits the take with her. Six months in, her state passes a daily cap and a fee cap. Her share shrinks. A year after that, a ban bill gets introduced. She spends more time reading legislation than servicing machines.

Her neighbor Tom (illustrative) puts the same money into three cash ATMs at a bar, a laundromat and a bowling alley. They net a few hundred dollars a month combined, sometimes a little more. He worries about cash use drifting down and moves one machine after a year to a busier spot. Nobody in the statehouse knows his name.

Neither of them got rich. One of them sleeps better.

The detailed operator guide on this exact topic is Bitcoin ATM vs Regular ATM Business: Licensing, Scams, State Bans, on VendBuddy’s (full disclosure: VendBuddy is my company) site. It goes further into the specifics than I have room for here.

My bottom line

I’m optimistic about bitcoin as a long-term asset and pessimistic about bitcoin ATMs as a small business. The margin is real, but it’s shrinking by law, it partly depends on people being scammed, and the whole thing can be switched off in a session. The best version of this business for a regular person is either a cash ATM route or renting your floor space to a licensed network.

If you want to try the cash ATM route, the first job is finding owners who say yes. VendBuddy (vendbuddy.io/app) lists convenience stores, bars and other cash-heavy shops in a ZIP along with who to talk to, and you don’t need a subscription to use it; credit packs work fine for one town.

And if a stranger ever tells you to put cash into a bitcoin machine: hang up. Every time.