Editor’s note: This article was updated on Jan. 11 to clarify the purpose of the bividend opt-in form.
Last year was an exciting time for cryptocurrencies, and especially for Bitcoin (CCC:BTC-USD). Celebrities and institutional investors jumped on board, and major companies enabled crypto payments. The release of the ProShares Bitcoin Strategy ETF (NYSEARCA:BITO) led the crypto to a record high just shy of $70,000. While BTC has fallen since then, it is clear that we are in a new era for crypto.
Now BTCS (NASDAQ:BTCS), a publicly listed blockchain technology firm, is seeking to further revolutionize the field. BTCS stock has been in the spotlight this week after the company announced it would be offering investors the chance to receive a Bitcoin dividend.
Why does this matter?
The market is certainly ripe for such an offering. Following his recent election, New York City Mayor Eric Adams stated that he would take his first three paychecks in Bitcoin, in response to a similar decree from Miami Mayor Francis Suarez. This shows that the No. 1 crypto continues to enter the mainstream.
However, not everyone is a fan. Even with prominent voices predicting a bright future for Bitcoin prices, not everyone agrees with BTCS. Shares soared more than 40% following the announcement, but questions remain. Let’s take a look at the Bitcoin dividend for BTCS stock holders through a broader lens.
What to Know About a Bitcoin Dividend for BTCS Stock
- According to BTCS CEO Charles Allen, the motive behind the company’s decision is to highlight the “disruptive nature of blockchain technology.”
- The BTCS team has branded this initiative the “bividend.” Its U.S. Securities and Exchange Commission filing states that the company “intends to pay $0.05 per share in Bitcoin, based on the Bitcoin price on the ex-dividend date.” Investors who make the decision not to receive the bividend will get 5 cents per share in cash.
- How do you get the bividend? As BTCS notes, it requires shareholders to follow an opt-in process. The deadline to do so is March 16, 2021. BTCS says it will pay out the dividend as soon as possible after that deadline.
- The company is currently evaluating future bividend payments.
- Some industry critics have been quick to raise concerns regarding the bividend plan. Ivory Johnson of Delancey Wealth Management told CNBC that buying Bitcoin directly was a better strategy than buying BTCS stock simply for this type of dividend.
- This sentiment was echoed by Bitcoin investor Douglas Boneparth of Bone Fide Wealth who espoused support for the idea behind the bividend but agreed with Johnson. He says the dividend alone isn’t reason to buy BTCS stock.
- BTCS shareholders who make the choice to receive the bividend must provide and secure their own Bitcoin wallet. This may be a deal breaker for investors without previous experience in crypto investing.
- It’s also worth noting that anyone who does opt for the bividend will be asked to provide their Social Security number and Bitcoin wallet address to BTCS’ transfer agent.
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On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.