Coinme Investment Guide: Strategies For Beginners

Coinme is a cryptocurrency exchange headquartered in Seattle, Washington, that offers technology for bitcoin ATMs and kiosks, allowing users to convert cryptocurrency into cash. Coinme became the first licensed Bitcoin ATM operator in the US in 2014 and has since expanded to over 9,500 Coinme-powered Coinstar Bitcoin ATMs. The company offers an easy and accessible way to buy and sell crypto using cash or debit, with over 40,000 locations worldwide. Coinme has raised over $25 million in funding and has investors such as Xpring, Blockchain.com Ventures, Pantera Capital, Digital Currency Group, and MoneyGram International.

Coinme's crypto-enabling technology

Coinme is a cryptocurrency exchange headquartered in Seattle, Washington. The company offers crypto-enabling technology for bitcoin ATMs and kiosks, which allow users to convert cryptocurrency into cash. Coinme was the first licensed operator of Bitcoin ATMs in the US in 2014.

Coinme's fees

Coinme is a cryptocurrency exchange that allows users to buy and sell cryptocurrencies with cash or debit cards. It was the first licensed Bitcoin ATM operator in the US and currently has over 9,500 Bitcoin ATMs and 40,000 retail locations across the country.

Coinme charges several fees for its services, which can be broadly categorised into Coinme App purchase fees and Coinme Cash Network Fees. Here's a detailed breakdown of the fees:

Coinme App Purchase Fees

When buying crypto through the Coinme app with a Visa or Mastercard, a 5.49% exchange fee and a 3.25% card processing fee (with a $1 minimum) are charged. On the other hand, selling crypto with a Visa incurs a 2% exchange fee and a 1.5% instant withdrawal fee.

Coinme Cash Network Fees

Coinme Cash Network Fees apply when using Coinme's Bitcoin ATMs or kiosks. Buying crypto through a Coinstar ATM incurs an 11% exchange fee and a 4% transaction fee, although these fees may vary by location. Coinme has partnered with MoneyGram to offer in-person transactions. MoneyGram Bitcoin ATMs charge a fee ranging from $2.75 to $5.75.

It is important to note that all transactions on Coinme are subject to network fees, which are charged by the blockchain network associated with the specific cryptocurrency being bought or sold. For example, ether transactions incur gas fees, while bitcoin transactions incur mining fees.

Coinme's risks

Coinme is a cryptocurrency exchange that lets users buy and sell crypto using cash, debit cards, or by transferring funds from external wallets. It is the official exchange software used in Coinstar and MoneyGram ATMs, allowing users to buy and sell crypto conveniently. However, there are several risks associated with using Coinme:

High Fees

Coinme charges a 5.49% transaction fee for buying crypto through its app. Using Coinme at a Bitcoin ATM attracts an additional transaction fee. Coinstar Bitcoin ATMs charge a 4% conversion fee, while MoneyGram Bitcoin ATMs charge a fee ranging from $2.75 to $5.75. Coinme's fees are significantly higher than those of most other crypto exchanges. For instance, purchases made through Coinme's Coinstar kiosks attract both a 'transaction fee' and a 'cash convenience fee', which combine to add an extra 12% fee to the cost of any bitcoin bought via the service.

Lack of Insurance

Coinme does not offer insurance on its crypto wallet, meaning that users' funds are not protected. Regular banks typically offer FDIC Insurance of up to $250,000 per depositor, but Coinme provides no such protection. Any funds stolen or lost will not be reimbursed by Coinme.

Volatility Risk

Like other cryptocurrencies, Bitcoin is highly volatile, with prices fluctuating significantly and sometimes dropping by thousands of dollars within a short time span. Using Coinme to buy crypto comes with the risk of loss, including the total loss of capital.

Security Risks

In 2021, $3.2 billion was stolen through crypto hacks, according to blockchain data analysis company Chainalysis. Coinme is a secure crypto exchange that uses SSL encryption and follows Know Your Customer (KYC) best practices for identity verification. However, it only offers a digital hot wallet, and Bitcoin funds are not protected via cold storage. There is also no crypto insurance for lost user funds due to theft or fraud.

Coinme's investors

Coinme, a cryptocurrency exchange headquartered in Seattle, Washington, has been a pioneer in the field of cryptocurrency ATMs and kiosks, allowing users to convert cryptocurrency into cash. The company was established in 2014 and has since become a leader in the industry, powering the largest cryptocurrency ATM network globally.

Coinme has raised over $25 million in funding over 11 rounds, with its latest funding round in October 2022 bringing in $0.77 million. The company's revenue for 2021 was $32 million. Coinme has 11 investors, including prominent names such as Xpring, Blockchain.com Ventures, Pantera Capital, Digital Currency Group, and MoneyGram International.

MoneyGram, a payments and money transfer company, partnered with Coinme in 2021, allowing customers to load cash into or out of bitcoin wallets from select MoneyGram locations in the U.S. This partnership expanded the accessibility of Coinme's services and solidified its position in the market.

Coinme's history

Coinme is a cryptocurrency exchange headquartered in Seattle, Washington. The company was founded in 2014 by Neil Bergquist and Michael Smyers, who serve as CEO and vice president of engineering, respectively. Coinme became the first licensed Bitcoin ATM operator in the US in 2014, deploying nearly 70 Bitcoin ATMs across the Western United States. The first state-licensed Bitcoin ATM in the country was installed by Coinme at the Spitfire Grill in Seattle in the spring of 2014.

Coinme has developed an application programming interface (API) that converts ATMs and kiosks into cryptocurrency-exchanging machines. In 2019, Coinme partnered with Coinstar, an operator of coin-converting kiosks, to enable consumers to purchase Bitcoin at existing Coinstar machines. By January 2022, more than 7,000 Coinme-enabled Coinstar kiosks were operating in the US.

Coinme also partnered with payments and money transfer company MoneyGram in 2021, allowing customers to load cash into or out of Bitcoin wallets from select MoneyGram retail locations. In 2022, MoneyGram purchased a 4% stake in Coinme.

Coinme has over 40,000 locations, including more than 9,500 Bitcoin ATMs, making it the largest cryptocurrency cash network in the world. The company offers competitive industry rates and instant transactions, eliminating the need to wait for trades to clear through online crypto exchanges.

In June 2021, Coinme had raised over $30 million in investment capital and employed 58 people. In 2023, the company was fined $4 million by the SEC for allegedly being involved in unregistered security offerings with UpToken. As of June 2024, Robert Villaseñor serves as the chief legal and compliance officer.

Frequently asked questions