Coinstar, the maker of kiosks that turn loose change into cash and gift cards, has partnered with cryptocurrency ATM startup Coinme to let users buy bitcoin.
The Seattle-based companies said bitcoin is available for purchase at select Coinstar kiosks in Safeway and Albertsons stores in California, Texas and Washington. As part of the partnership, Coinstar invested an undisclosed sum in Coinme.
The companies did not say how many of the Coinstar’s 20,000 kiosks would allow bitcoin purchases. Users won’t have the satisfaction of turning a physical coin into a digital one: bitcoin can only be purchased with cash, up to a limit of $2,500. In exchange for cash, Coinstar will provide a code that can be redeemed on Coinme’s website.
The new service comes at a time when bitcoin is in the dumps.
Bitcoin’s value dropped more than 70 percent last year, trading volume on major exchanges has plummeted, and the market for initial coin offerings has dried up.
But Coinme CEO and co-founder Neil Bergquist thinks the cryptocurrency is more useful now than ever.
“People are moving away from gambling on the future price of digital currency and instead are leveraging digital currencies for their inherent technological advantages thanks to blockchain technology,” Bergquist told GeekWire in an email.
Coinme launched in 2014 and has raised $1.5 million to date. It earns money through transaction fees and a cryptocurrency advisory service for customers with larger transactions.
There are over 4,000 bitcoin ATMs globally, according to data from Coin ATM Radar. Coinme ranks ninth among cryptocurrency ATM operators with 54 locations. Genesis Coin and General Bytes operate the most ATMs, with more than 1,000 locations each.
Bergquist said that Coinme’s ATMs have seen increased use during the latest bitcoin “winter.”
“Our customers are leveraging bitcoin as a medium of exchange for remittances, a diversified store of value for their portfolio, or simply as a gift for that ‘crypto-curious’ family member,” he said.
Founded in 1991, Coinstar was previously owned by Outerwall, which was acquired by Apollo Global Management in 2016. Apollo split Outerwall’s three core businesses — Coinstar, Redbox, ecoATM — into separate enterprises.
Coinstar continues to add new capabilities to its kiosks. Last year it announced an integration with Seattle startup doxo that lets people pay bills at the kiosks and also added Amazon Cash deposit capability.