Russell Okung’s bitcoin salary could trigger more pro athletes to invest

Russell Okung #76 of the Carolina Panthers

Grant Halverson | Getty Images

It’s usually referred to as a brand new type of gold, and now Carolina Panthers offensive linemen Russell Okung is making an enormous wager on bitcoin.

After a virtually two-year battle, Okung lastly had his want granted and can have his salary diverted to buying bitcoin with the help of cell fee agency Strike. The National Football League and its gamers’ union accredited the settlement that permits the Panthers to pay a part of Okung’s $13 million salary to Strike so it may be transformed to bitcoin.

“Money is more than currency; it’s power,” mentioned Okung in a press release. “The way money is handled from creation to dissemination is part of that power. Getting paid in bitcoin is the first step of opting out of the corrupt, manipulated economy we all inhabit.”

To be clear, the Panthers usually are not paying Okung instantly in bitcoin. Instead, the group will divert roughly $6.5 million from Okung’s salary to Strike, which can then presumably take a charge and course of bitcoin transactions for Okung, a longtime advocate of the forex.

Strike didn’t reply to a CNBC request to affirm the transaction charges related to Okung’s settlement.

Bitcoin is buying and selling at more than $27,000, so Okung will obtain roughly 240 cash at that worth. Since his taking part in days with the Los Angeles Chargers in 2019, Okung lobbied to have his salary changed with bitcoin.

“He’s hoping long-term that the price of bitcoin is going up,” Chris Matta, co-founder of Crescent Crypto Asset Management, informed CNBC on Tuesday. “And this move is a show of his support and long-term bullishness for bitcoin growing even more from here.”

It’s like gold, nevertheless it’s not gold

Bitcoin was launched in 2008 and produced fortunes for some when a single bitcoin surged from underneath $1,000 to practically $20,000 in 2017. That sparked a bull market in new crypto-based funds.

Bitcoin has since gained recognition with Covid-19 disrupting economies as traders search for safekeeping through the pandemic. For a long time, gold was the same old security web for traders, however Matta mentioned bitcoin is now seen instead.

“It’s become hugely attractive as a hard asset, especially during Covid-19 and all the consumer concerns about the global economy and geopolitical environment,” Matta mentioned, referencing billionaire hedge fund supervisor Paul Tudor Jones’ feedback to invest more in bitcoin.

“The new digital gold, as it’s called,” Matta added. “It’s brought bitcoin to the forefront of investment portfolios this year, and there is a ton of interest around it as a result.”

Matta mentioned Okung’s bitcoin would probably be positioned in offline digital wallets referred to as “cold storage.” The transfer provides Okung more safety from potential hackers wanting to steal the forex from his account. Bitcoin accounts aren’t protected like financial institution accounts, that are FDIC-insured.

“Keeping it offline is a much safer way, especially for someone like Russ who is outspoken about bitcoin,” Matta mentioned. “Anyone who is vocal in the bitcoin space is a target for cyber-hacking.”

Russell Okung #76 of the Los Angeles Chargers heads off the sphere following the sport in opposition to the Seattle Seahawks at CenturyLink Field on November 4, 2018 in Seattle, Washington.

Otto Greule Jr | Getty Images

Risky transfer?

But like several funding, Okung, 32, is taking a substantial threat.

Drew Hawkins, CEO of Edyoucore, a monetary consulting agency, mentioned the frequent fraudulent exercise surrounding bitcoin is a priority and added, “a lot of guys need to understand what it is and how it works and what it is not.

“It’s a threat by way of what they are going to get of their palms with assured {dollars} from a contract versus of taking probabilities with regards to what this worth of bitcoin will or is not going to be,” Hawkins said.

Though approaching fresh highs, volatility still haunts bitcoin due to its steep corrections history, which in 2017 dropped the trading price to $3,000 for a single coin.

On Monday, Mark Newton of Newton Advisors told CNBC’s “Trading Nation” his estimations show bitcoin’s current cycle “peaking out in early January.” He said there could be opportunities to start buying the cryptocurrency at lower prices by then.

“Bitcoin has been a particularly risky asset,” said Matta. “But over the long run, it is in all probability been the most effective performing asset of the final 10 years. But if you do not know what you are doing and never investing on this factor long-term, there might be quite a lot of volatility in-between.”

Added Hawkins: “People have finished properly and made some huge cash off of it, however you have additionally had an equal quantity of conditions that ended up not panning out to what someone was anticipating or ended up in some substantial losses.”

Are more athletes going bitcoin?

Strike is also coordinating more arrangements emulating Okung’s with players from the Brooklyn Nets and New York Yankees, according to bitcoin news site CoinDesk. The site did not name the players involved.

Matta said Okung’s move would provide more credibility for bitcoin, and that could trigger even more athletes to invest in digital currencies. Potential investors can also purchase bitcoin through other mobile payment apps, including PayPal, Cash App and Square.

“Covid-19 hyper-charged the expansion of bitcoin,” Matta said. “I believe this could’ve occurred to bitcoin anyway; it simply could have taken a couple of more years to get to this level.”

— CNBC’s Hugh Son contributed to this report.

Correction: A single bitcoin surged from underneath $1,000 to practically $20,000 in 2017. An earlier model misstated the yr.

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