Bitcoin kiosk network reaches Delaware
Those who want to own burgeoning cryptocurrency now have an even easier way to invest, as the national Coinstar kiosk network has brought its exchange to its 36 Delaware locations.
Partnering with 6-year-old, Seattle-based cryptocurrency company Coinme, a 10-state expansion now allows First State shoppers to literally invest cash into bitcoin, the digital currency underpinned by blockchain technology that has become the darling of tech proponents. It’s a growing focus for Coinstar, which is better known for converting loose change into dollar bills.
A bitcoin doesn’t have a physical representation, but it does have value: about $18,300 per unit as of Thursday. Just five years ago, a bitcoin could be purchased for less than $500.
Such cryptocurrency, which also includes other “coins” like Ethereum and Litecoin, are prone to large swings on markets. In December 2017, the blue-chip Bitcoin touched a then-high of more than $14,000 but about a year later was trading for less than $3,500 in January 2019.
Since that low point, bitcoin has fairly steadily gained value though. Through the COVID-19 pandemic, many have sought out the cryptocurrency as an investing safe haven, pushing its value to new peaks. While a traditionally safe investment like gold is up 25% this year, bitcoin’s value has risen 150% year to date.
“The Federal Reserve is publicly saying that their strategy is to drive inflation, so your dollars today aren’t going to be worth as much in the future,” said Neil Bergquist, co-founder and CEO of Coinme. “People are starting to realize that and are turning to alternative assets such as Bitcoin as a store of value.”
Bergquist explained that its Coinstar partnership allows it to offer cryptocurrency investment to the masses where they congregate, typically grocery stores and pharmacies. The locations now active in Delaware include Acme, Safeway, Food Lion, Redners Warehouse Markets, Giant, and more.
While polls show that Americans are becoming more familiar with cryptocurrency, only about 6% of the population holds it as an investment. Bergquist believes that offering kiosk transactions will boost that figure, noting the majority of its customers are first-time buyers.
“Our opportunity with Coinstar is to provide an easy, trusted way for people to buy bitcoin. This enables those that have that interest to cross the river so to speak,” he said.
While bitcoin may hold a five-figure value, investors can buy as little as one hundred-millionth of a unit. Coinme allows a minimum investment of $1, but Bergquist said the average buy is $500. Customers don’t need to have a Coinme account at the initial purchase, with investments turned into redemption codes that are sent to phones and claimed once a verification process is completed.
“We do provide that secure and trusted custody of the coin so you don’t have to feel like you need to be a computer scientist in order to own bitcoin. We’ll take care of the security complexity,” Bergquist said.
While Coinme has focused its early life on its application programming interface with Coinstar kiosks to date, charging a 4% transaction fee as its cut, Bergquist said that the company will be launching an internet-based bitcoin trading platform in the first quarter of 2021 as well.