Russell Okung # 76 from Carolina Panthers
Grant Halverson | Getty Images
It is often referred to as a new form of gold, and now Carolina Panthers offensive line officers Russell Okung are making a massive bet on bitcoin.
After a battle of almost two years, Okung has finally received the wish and will have his salary diverted when buying bitcoin with the help of the mobile payment company Strike. The National Football League and its players’ union have approved an agreement that allows the Panthers to pay part of Okung’s $ 13 million salary to Strike so that it can be turned into bitcoin.
“Money is more than money; it is power,” Okung said in a statement. “The way money is managed from creation to dissemination is part of this power. Being paid in bitcoin is the first step in giving up the corrupt and manipulated economy we all live in.”
To be clear, the Panthers do not pay Okung directly in bitcoin. Instead, the team will divert about $ 6.5 million from Okung’s salary to Strike, which will likely take a fee and process bitcoin transactions for Okung, a longtime currency lawyer.
Strike did not respond to a CNBC request to confirm the transaction fees associated with the Okung agreement.
Bitcoin is trading at over $ 27,000, so Okung will receive about 240 coins at this value. Since playing with the Los Angeles Chargers in 2019, Okung has lobbied for the salary to be replaced with bitcoin.
“He hopes in the long run that the price of bitcoin will rise,” Chris Matta, co-founder of Crescent Crypto Asset Management, told CNBC on Tuesday. “And this move is a testament to its support and long-term growth for bitcoin growing even further here.”
It’s like gold, but it’s not gold
Bitcoin was introduced in 2008 and last year produced fortunes for some, when a single bitcoin rose from under $ 1,000 to almost $ 20,000. This has triggered a stock market in the new crypto-based funds.
Since then, Bitcoin has gained popularity with Covid-19 which is disrupting economies as investors seek storage during the pandemic. For decades, gold has been the usual safety net for investors, but Matta said bitcoin is now seen as an alternative.
“It has become extremely attractive as a heavy asset, especially during Covid-19 and all consumer concerns about the global economy and geopolitical environment,” said Matta, referring to comments from billionaire hedge fund manager Paul Tudor Jones of invest more in bitcoin.
“The new digital gold, as it is called,” Matta added. “It has brought bitcoin to the forefront of investment portfolios this year, and as a result, there is a ton of interest around it.”
Matta said Okung’s bitcoin would probably be placed in offline digital wallets, called “cold storage.” The move gives Okung more protection against potential hackers who want to steal the currency from his account. Bitcoin accounts are not protected like bank accounts, which are insured by the FDIC.
“Keeping offline is a much safer way, especially for someone like Russ, who is honest about bitcoin,” Matta said. “Anyone who is vocal in the bitcoin space is a target for cyber-hacking.”
Russell Okung # 76 of the Los Angeles Chargers leaves the field after the game against the Seattle Seahawks at CenturyLink Field on November 4, 2018 in Seattle, Washington.
Otto Greule Jr | Getty Images
Risky move?
But like any investment, the 32-year-old Okung takes a considerable risk.
Drew Hawkins, CEO of Edyoucore, a financial consulting firm, said the frequency of fraudulent activity around bitcoin is a concern and added: “Many guys need to understand what is and how it works and what is not.
“It’s a risk in terms of what they will receive in their hands with guaranteed dollars from a contract, rather than taking risks in terms of the value or not of this value of bitcoin,” Hawkins said.
Although it is approaching fresh highs, volatility still haunts bitcoin due to its history of steep corrections, which in 2017 lowered the trading price to $ 3,000 for a single currency.
On Monday, Newton Advisors’ Mark Newton told CNBC Trading Nation that his estimates show that the current bitcoin cycle is “peaking in early January.” He said there could be opportunities to start buying bitcoin at lower prices by then.
“Bitcoin has been an extremely volatile asset,” Matta said. “But in the long run, it was probably the best performing asset in 10 years. But if you don’t know what you’re doing and you’re not investing in it in the long run, there will be a lot of volatility in between. “
Hawkins added: “People did well and made a lot of money out of it, but you also had an equal amount of situations that ended up not looking at what someone was anticipating or led to substantial losses.
Do more athletes go bitcoin?
Strike also coordinates several arrangements that mimic Okung 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 will give more credibility to bitcoin and could lead to more athletes investing in digital currencies. Potential investors can purchase bitcoin through other mobile payment apps, including PayPal, Cash App and Square.
“Covid-19 has taken a huge toll on bitcoin’s growth,” Matta said. “I think this would have happened to Bitcoin anyway; maybe it would have taken a few more years to get to this point. ”
– CNBC’s Hugh Son contributed to this report.