Russell Okung’s bitcoin wage might set off extra professional athletes to speculate

Russell Okung # 76 of the Carolina Panthers

Grant Halverson | Getty Images

It’s often referred to as a new form of gold, and now the Carolina Panthers offensive linemen Russell Okung is betting heavily on Bitcoin.

After almost two years of struggle, Okung finally fulfilled his wish and will have his salary diverted to the purchase of Bitcoin with the help of the mobile payment company Strike. The National Football League and its players’ union approved the deal, which will allow the Panthers to pay part of Okung’s $ 13 million salary to Strike so it can be converted into bitcoin.

“Money is more than currency, it is power,” Okung said in a statement. “The way money is handled from creation to diffusion is part of that power. Paying in Bitcoin is the first step in ending the corrupt, rigged economy we all live in.”

To be clear, the Panther Okung do not pay directly in Bitcoin. Instead, the team will divert around $ 6.5 million of Oken’s salary onto the strike, who will then presumably collect a fee and process Bitcoin transactions for Okung, a longtime advocate of the currency.

Strike did not respond to a CNBC request to confirm the transaction fees associated with Oking’s agreement.

Bitcoin is trading at more than $ 27,000, so Okung receives roughly 240 coins at that value. Since joining the Los Angeles Chargers in 2019, Okung has been campaigning for Bitcoin to replace his salary.

“He has long-term hope that the price of Bitcoin will rise,” Chris Matta, co-founder of Crescent Crypto Asset Management, told CNBC on Tuesday. “And this move is evidence of his support and long-term upward movement for Bitcoin, which will grow even more from here.”

It’s like gold, but it’s not gold

Bitcoin was launched in 2008 and made fortunes for some last year when a single bitcoin jumped from under $ 1,000 to nearly $ 20,000. This sparked a bull market for new crypto-based funds.

Bitcoin has since grown in popularity as Covid-19 disrupts economies as investors look for safety during the pandemic. Gold was the usual safety net for investors for decades, but Matta said Bitcoin is now being viewed as an alternative.

“It has become extremely attractive as a hard commodity, particularly during Covid-19 and all of consumer concerns about the global economy and geopolitical environment,” Matta said, referring to the comments made by billionaire hedge fund manager Paul Tudor Jones on more in Bitcoin invest.

“The new digital gold, as it is called,” added Matta. “It put Bitcoin at the top of investment portfolios this year, and as a result, there’s been a lot of interest in it.”

Matta said Okens Bitcoin would likely be placed in offline digital wallets known as “cold stores.” The move gives Okung more protection from potential hackers who want to steal the currency from their account. Bitcoin accounts are not protected like FDIC-insured bank accounts.

“Keeping it offline is a lot safer, especially for someone like Russ who advocates Bitcoin,” Matta said. “Anyone vocal in bitcoin is a target for cyber hacking.”

Russell Okung # 76 of the Los Angeles Chargers leaves the field after beating the Seattle Seahawks at CenturyLink Field on November 4, 2018 in Seattle, Washington.

Otto Greule Jr | Getty Images

Risky step?

But like any investment, the 32-year-old Okung takes a significant risk.

Drew Hawkins, the CEO of Edyoucore, a financial advisory firm, said the common fraudulent activity related to Bitcoin was worrying, adding, “A lot of people need to understand what it is and how it works and what it doesn’t.

“It’s a risk on what you can get your hands on with guaranteed dollars from a contract versus taking risks on that value of Bitcoin or not,” Hawkins said.

Although volatility is nearing new highs, it is tracking Bitcoin because of its steep correction history, which brought the trading price of a single coin down to $ 3,000 in 2017.

On Monday, Mark Newton of Newton Advisors told CNBC’s “Trading Nation” that his estimates show that Bitcoin’s current cycle will “peak” in early January. He said there could be opportunities to buy bitcoin at lower prices by then.

“Bitcoin was an extremely volatile asset,” said Matta. “But in the longer term, it’s probably the best performing asset in the last 10 years. But if you don’t know what you’re doing and don’t invest in this thing long term, there will be a lot of volatility.” -between.”

Hawkins added, “People have done well and made a lot of money from it, but they have also had the same number of situations where what someone was expecting was not found out or where there were significant losses.”

Are More Athletes Going Bitcoin?

According to Bitcoin news site CoinDesk, Strike is also coordinating other agreements that mimick Okung’s with players from the Brooklyn Nets and New York Yankees. The side did not name the players involved.

Matta said Okk’s move would give Bitcoin more credibility, and that could spur even more athletes to invest in digital currencies. Potential investors can also buy Bitcoin through other mobile payment apps like PayPal, Cash App, and Square.

“Covid-19 overloaded bitcoin’s growth,” Matta said. “I think that would have happened to Bitcoin anyway. It could only have been a few more years to get to this point.”

– CNBC’s Hugh Son contributed to this report.

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