Automatic teller machines (ATM) operator, Stargroup Ltd [ASX:STL], posted one of their largest gains yesterday. The stock jumped as high as 43.5%, to 3.3 cents. While the stock has come down since, it’s still up 17.9%.
Why did investors become so bullish on this $19.6 million company?
Yesterday, Stargroup announced that they would help facilitate the buying and selling of bitcoins. They wouldn’t do this online. Rather they would create two-way ATMs for Aussies to buy and sell their bitcoins for cash.
Stargroup has partnered with software company and bitcoin miner, DigitalX Ltd [ASX:DCC].
As you may already know, bitcoin and cryptocurrencies have really picked up steam in 2017. Not only has popularity increased, the prices of bitcoin and other cryptos have jumped through the roof.
Source: Cryptocurrency Chart
Stargroup’s CEO, Todd Zani, said in their announcement:
‘Stargroup is pleased to partner with DigitalX on this project and leverage its unique ownership of its ATM manufacturer to develop a two-way ATM where a Bitcoin owner can not only buy Bitcoin but more importantly can cash their bitcoin out. This development may also be able to be applied to other cryptocurrencies and be distributed internationally.’
Today, there are less than 20 ATMs in Australia that provide bitcoin transactions. And these ATMs are also only one-way. Meaning you can only buy bitcoins to add to your digital wallet. They don’t allow you to sell your bitcoins for cash.
It’s a nice idea. But I’m sceptical — is this really going to be the easiest way for bitcoin holders to cash out? What makes it so hard right now to sell bitcoin on an exchange, for there to be a need for bitcoin ATMs?
We’ll see what the market has to say.
Junior Analyst, Money Morning
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