Crypto was a niche technology experiment in its early days, and now, it is a multitrillion-dollar asset class. It has sparked both fervent enthusiasm and intense skepticism. As one of the earliest U.S.-based cryptocurrency exchanges, Coinme has seen both sides of this coin. However, after weathering some initial obstacles and lean times, co-founder and CEO Neil Bergquist is more optimistic than ever. The company has celebrated its 10th anniversary this year by marking $1 billion in sales.
“When we got started, we were one of the first 10 locations in the world,” Bergquist recalls. “Now that we’ve solved the access problem. There are more Coinme cash locations than the largest private bank ATM networks or branches.”
Ten years in, Bergquist can reflect on the ups and downs of his company’s progression to its current leading role. He also highlights the broader context of the growth and future outlook of Bitcoin and the crypto industry.
Early Days and the 2017 Boom
Bergquist entered the crypto space in 2014 when most people had never even heard the words “crypto” or “Bitcoin.” He and his co-founder, Michael Smyers, started by purchasing three Bitcoin ATMs when Bitcoin’s price was about $400.
“At the time, the entrepreneurial mantra was ‘build fast and break things,'” Bergquist noted. “Unfortunately, we wanted to operate a money services business in the U.S. If you ‘break things,’ you risk going to jail.”
This reality forced Coinme to take a measured approach, focusing on regulatory compliance from the outset. Bergquist worked with Washington state regulators to ensure compliance before launching the company’s handful of Bitcoin ATMs. Those ATMs are situated at locations like a local restaurant and shopping mall in Seattle.
While the general public was largely unaware of cryptocurrency, massive jumps in Bitcoin trading volume and value occurred in 2013. Those surges were sending signals that a boom could be on the horizon. The value of Bitcoin shot up exponentially in late 2013. It rose from $214 in November to a high of roughly $1,200 in December.
Market Volatility and Price Trajectory
The first real-world Bitcoin transaction occurred on May 22, 2010, now known as Bitcoin Pizza Day. Laszlo Hanyecz paid 10,000 BTC for two Papa Johns’ pizzas, worth about $25 at the time. At Bitcoin’s peak price in 2024, those same pizzas would have cost over $689 million.
Of course, Bitcoin’s price history has been marked by volatility. In 2013, Forbes named Bitcoin the year’s best investment. The following year, Bloomberg declared it the worst investment of 2014.
Thus, Bergquist entered the market during one of Bitcoin’s “crypto winters.” It is a term used to describe extended bear markets in the crypto space.
“The Bitcoin ATMs made revenue on day one as our revenue came from transaction fees, but our costs exceeded revenues for at least the first six years. It was brutal,” Bergquist admitted.
However, he remained patient and optimistic about what the future could bring. He focused on the viability of a decentralized digital currency and the need to make it accessible to the broader public as it gained traction and value.
Growing With the Crypto Industry
Sure enough, as the crypto market grew, so did Coinme. By 2017, the company had established a foothold for its Bitcoin ATMs in the Western U.S., leaving them in a prime position to meet the public’s calls for legitimate access to the now-booming cryptocurrency.
However, it was the company’s partnerships with established financial service providers that propelled it to another level. In early 2019, Coinme announced a partnership with Coinstar, a company known primarily for converting loose change into banknotes or gift cards. Rather than build its own ATMs, Coinme installed an API that enabled users to exchange physical cash for Bitcoin on machines made by Coinstar.
This strategic move dramatically expanded Coinme’s reach. By mid-2019, the company had jumped from 70 to 2,100 locations across the U.S., growing from the Western U.S. to key markets such as Boston, Chicago, the District of Columbia, and Philadelphia. Over 7,000 Coinme-enabled Coinstar kiosks were operating in 48 states by 2022.
In 2021, the company announced another significant partnership, this time with peer-to-peer payment company MoneyGram, enabling users to exchange cash for Bitcoin and vice versa at roughly 20,000 MoneyGram locations. In January 2022, MoneyGram acquired a 4% stake in Coinme as part of an ongoing commitment to integrate cryptocurrency services with traditionally accessible financial systems.
“I think focusing on trust and a partner network is really important,” says Bergquist. “The reason why we’re in the largest grocery retailers in the United States is because we’ve solved the trust problems and we make crypto safe, we de-risk it, and that’s why we have these massive partnerships in place.”
Coinme and Bitcoin in 2024
As of 2024, the cryptocurrency market has entered a new phase of maturity and mainstream acceptance. The total cryptocurrency market capitalization has topped $2 trillion, with Bitcoin leading the way.
Growing alongside the market, Coinme now enables users to cash in and out of cryptocurrency at over 40,000 physical locations throughout the country, making it the largest cash exchange network in the world. In addition to eclipsing the milestone of conducting more than $1 billion in sales, the company was recognized as one of the fastest-growing companies in North America by The Financial Times.
The firm recently revealed that crypto purchases made at over 9,700 Coinstar kiosks across 48 states will now be automatically and instantly loaded into users’ digital wallets without the need for a redemption code.
In early April 2024, Coinme announced a partnership with global digital payments platform CiNKO, highlighting international payment channels to Latin America and the Caribbean.
“Over the 10 years, we achieved an average annual revenue growth rate of 164%,” said Bergquist. “We’ve survived three crypto winters, growing to over 40,000 locations where we’ve crypto-enabled existing kiosks and ATMs. This pivot from hardware to software has helped us scale and become profitable. We’re fortunate to be on pace to double revenue this year.”
