Field Trip - Visit a bitcoin ATM
Learning Outcomes
What is it like to find and use a bitcoin ATM
Research the potential fee we might be charged to buy bitcoin
Calculate how much bitcoin we could receive after paying the fee
Calculate the sell price to break-even after calculating the available bitcoin received
Find a bitcoin ATM
We have learned in a previous post about a site that lists the bitcoin ATM machines, the site we want to navigate to is: https://coinatmradar.com
When the site loads you will see a request for your local area, enter your city and click the glass icon
I am based in London, United Kingdom. So after entering London, this is what I found
Our first option, London Laundry Club has the facility to buy and sell, it has a buy limit of £2500 per transaction with a daily limit of £100,000
Clicking the details button will show more information about the venue and the services they offer.
You should email the British Crypto Exchange to confirm the ATM device is operational
There is a business phone number for the London Laundry Club, call the number and check if the ATM is located on their premises and ask how frequently it is being used, to save a wasted journey.
The site doesn't provide any details of the fees to buy which is really what we want to know, to find out google came up with the statement below.
Lets do some calculations to estimate how much bitcoin we will receive based on the information above.
BTC Market rate: $41134
I have £100 to spend
£1 will buy $1.31 so our £100 would buy $131 this could fluctuate on the ATM when converting sterling to dollars.
The formula is: funds / market rate
131 / 41134 = 0.00318471
To calculate all the percentages I will move this to excel and prepare a table for better reference.
I have assumed the device will convert our £100 to dollars and have kept all calculations in dollars until the end when I convert back to sterling to prove the fee value and final available value adds up to our original £100.
As you can see from the table above, the fee's to use a bitcoin ATM can be very high.
If you would like to replicate this in excel here are the formulas used in the above calculations.
Based on the figures above you may want to know what the Bitcoin price has to be in order to breakeven, you would then have to wait longer for the price to increase further to give you some profit.
Here are the formulas used in the above example
To calculate the increase percent we need in the bitcoin price I used the goal seek function in excel, use this after you have completed entering all the additional formulas above. Be sure to set the initial increase percent value to 0.001, the goal seek function will be changing that value to make the sterling price reach £100.
Excel finds a solution by incrementing cell I14 until cell L14 reaches £100.
The goal seek function can be found on the Data ribbon within the What If analysis functions.
If we used the maximum transaction amount of £2,500 this is how the numbers would look: (you don't need to recalculate the Increase percent with the goal seek function, they will always stay the same)
You just change the following cells:
B1 = BTC Market rate
B2 = Sterling amount to spend
B3 = Dollar exchange rate
If you decide to change the Fee % in column B then you will need to run the goal seek function again to calculate the correct Increase Percent amount.
This exercise demonstrates what the potential fee could be based on the percent range estimates found on the web, a bonus was to include the calculation to find how much the bitcoin market price would need to increase so you could break-even.
Preparing to go checklist
Call venue to check the Bitcoin ATM is operational and if anyone has used it today
Withdraw cash from the bank
Find parking nearby or tube / train station
Take some laundry to support the venue
Check the machine to see what the buy fee is
Calculate how much bitcoin I will receive, decide how much if any to buy
Summary
We have found a local Bitcoin ATM, discovered a range of potential fee percentages and tabulated the amounts that could be charged. As a bonus we calculated the sell price percentage increase to be able to breakeven on the purchase of bitcoin.
Next Steps
I would like you to enter the details and formula into excel to play around with the different fee percentages and the required sell price increase to break-even. Also you should try and extend this to calculate the sell price so it will give you the profit you would like.
If you don't have access to excel, please use the blank sheet below to enter values and manually calculate the formulas using the examples above.
