BTM - The Story of the Bitcoin ATM the Market Forgot

Bitcoin Depot is the world's largest Bitcoin ATM company. With over 9,200 machines across North America and Australia, it holds a 30% market share in the U.S.

I didn't find this stock by chasing crypto hype. I found it by hunting for market mistakes.

Every month I run a screener looking for companies the market has abandoned—but that are still alive and kicking. My rules are simple:

• Price-to-Sales ratio (P/S)2 below 1 — I want companies trading for less than their annual revenue. That's a bargain.

• Positive performance over the last 12 months — I don't want to catch a falling knife; I want a stock that's already bottomed and is starting to recover.

Bitcoin Depot passed both tests.

• 📊 P/E Ratio: ~8-11

• 💰 P/S Ratio: 0.15

• 🏢 EV/Revenue: 0.19

• 💵 Net Cash Per Share (Quarterly): -$0.36

• ₿ Inventory (Bitcoin): $13.6 million

• 🎁 Dividends: 0

• 📈 Return on Invested Capital (ROIC): 16.27%

While you're reading this, someone is walking into a Circle K convenience store with $300 in cash they need to send digitally. The bank won't help them. Coinbase requires 3 days of verification. Bitcoin Depot helps them in 60 seconds3.

The business is simple:

1. The ATM: Customers insert cash into one of 9,800+ machines.

2. The Spread: BTM converts the cash to Bitcoin and sends it to the user's wallet, charging a ~15-20% fee.

3. The Logistics: Armored trucks collect the cash, and BTM uses it to buy more Bitcoin.

This isn't a tech company. It's a logistics company (or as Peter Lynch would call it—"Picks and Shovels"4)—similar to Coinstar or Western Union, just for crypto.

After checking their net debt, which stood at $7.9 million in Q3, I went to check their crypto holdings (primarily Bitcoin). They have approximately 100 Bitcoins.

• If Bitcoin trades today at $92K, that's $11 million, and net debt becomes net cash of $3.1 million. That means you get each share at a $0.05 discount (because there's Bitcoin backing it).

• If Bitcoin returns to $122K, that's $14.6 million, and net cash would be $6.7 million. That means you get each share at a $0.10 discount.

The logic is nice - a 7% discount on the share price - but that's not enough to close a deal.

I promised you 3 reframings—here are 2 combined into one.

Competitors are growing, but the market is still a blue ocean. However, it's ceasing to be the Wild West—because regulation is planning to cap fees at 15% in California, or require refunds to fraud victims if reported within 30 days in Arizona. Not good news.

But bad news for the market is good news for the leaders. Regulation will push competition out—because the impact of regulation on a company with 1,200 machines versus one with 9,000 machines is completely different (Reframing #2).

It appears BTM has decided to be first in regulatory compliance at the expense of user experience (5-hour delay), which explains the slowdown in new customer acquisition:

• Tightening regulation — 11 states have already enacted laws; lawsuit in Iowa

• Regulation caps fees at 15% in California (effective January 2025)

• Arizona (September 2025): Mandatory refunds to fraud victims, transaction limits of $2,000/day

• Bitcoin dependency — Price drop = demand drop

• Share dilution — Share count increased 27% in the past year

I'm buying this company because they're market leaders with proven growth - revenue +20%, profit +139%, and they've shown they can acquire their competitors, who will be easy to deploy. If they don't survive regulation, no one will. If they have a problem, the whole market has a problem. Regulation that hurts everyone—hurts the small players more.

1. A filtering tool that allows searching for stocks on specific financial criteria. 

2. P/S (Price to Sales) — Market cap divided by annual revenue. The lower it is, the "cheaper" the stock.

3. There has been a change in timing, which I address later. The first-time customer onboarding process takes 2 minutes; until they see the money in their crypto wallet takes 5 hours.

4. An investment strategy of investing in those who supply tools to an industry rather than participating in it directly. 

5. Changing one's perspective on a situation or problem to see it differently.