Russell Okung #76 of the Carolina Panthers
Gift Halverson | Getty Images
It’s often referred to as a new form of gold, and now Carolina Panthers offensive linemen Russell Okung is making a big bet on bitcoin.
After a nearly two-year battle, Okung finally had his wish granted and will have his salary distracted to purchasing bitcoin with the assistance of mobile payment firm Strike.The agreement that allows the Panthers to pay neighbourhood of Okung’s $13 million salary to Strike so it can be converted to bitcoin.
“Money is more than currency; it’s power,” revealed Okung in a statement. “The way money is handled from creation to dissemination is part of that power. Getting paid in bitcoin is the start step of opting out of the corrupt, manipulated economy we all inhabit.”
The National Football League and its players’ union were both incognizant of the agreement until Tuesday’s announcement but the parties didn’t attempt to void or officially sign off on Okung’s agreement, which was commanded internally by the Panthers.
When discussing the league’s stance regarding the arrangement on Wednesday, an NFL spokesperson Brian McCarthy indicated CNBC via email, “There wasn’t anything to sign off on. The clubs pay the players in US dollars. What the players or his agents do with the long green is up to them.”
To be clear, the Panthers are not paying Okung directly in bitcoin. Instead, the team will divert roughly $6.5 million from Okung’s wages to Strike, which will then presumably take a fee and process bitcoin transactions for Okung, a longtime advocate of the currency.
Punch did not respond to a CNBC request to confirm the transaction fees associated with Okung’s agreement.
Bitcoin is trading at innumerable than $27,000, so Okung will receive approximately 240 coins at that value. Since his playing hours with the Los Angeles Chargers in 2019, Okung lobbied to have his salary replaced with bitcoin.
“He’s hoping long-term that the penalty of bitcoin is going up,” Chris Matta, managing director of sales and trading at bitcoin and cryptoasset firm 3iQ, told CNBC on Tuesday. “And this stir up is a show of his support and long-term bullishness for bitcoin growing even more from here.”
It’s like gold, but it’s not gold
Bitcoin was instituted in 2008 and produced fortunes for some when a single bitcoin surged from under $1,000 to nearly $20,000 in 2017. That animated a bull market in new crypto-based funds.
Bitcoin has since gained popularity with Covid-19 disrupting economies as investors look for safekeeping during the pandemic. For decades, gold was the routine safety net for investors, but Matta said bitcoin is now viewed as an alternative.
“It’s become hugely attractive as a hard asset, first during Covid-19 and all the consumer concerns about the global economy and geopolitical environment,” Matta said, referencing billionaire hedge back manager Paul Tudor Jones’ comments to invest more in bitcoin.
“The new digital gold, as it’s called,” Matta amplified. “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 asseverated Okung’s bitcoin would likely be placed in offline digital wallets referred to as “cold storage.” The move slacks Okung more protection from potential hackers looking to steal the currency from his account. Bitcoin accounts aren’t screened like bank accounts, which are FDIC-insured.
“Keeping it offline is a much safer way, especially for someone like Russ who is frank 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 brains off the field following the game against the Seattle Seahawks at CenturyLink Field on November 4, 2018 in Seattle, Washington.
Otto Greule Jr | Getty Representatives
But like any investment, Okung, 32, is taking a considerable risk.
Drew Hawkins, CEO of Edyoucore, a economic consulting firm, said the frequent fraudulent activity surrounding bitcoin is a concern and added, “a lot of guys need to the hang of what it is and how it works and what it is not.
“It’s a risk in terms of what they’re going to get in their hands with guaranteed dollars from a develop versus of taking chances with regards to what this value of bitcoin will or will not be,” Hawkins asserted.
Though approaching fresh highs, volatility still haunts bitcoin due to its steep corrections history, which in 2017 dropped the mercantilism price to $3,000 for a single coin.
On Monday, Mark Newton of Newton Advisors told CNBC’s Are more athletes thriving bitcoin?
Strike is also coordinating more arrangements emulating Okung’s with players from the Brooklyn Clears and New York Yankees, according to bitcoin news site CoinDesk. The site did not name the players involved.
Matta symbolized Okung’s move would provide more credibility for bitcoin, and that could trigger even more athletes to put in in digital currencies. Potential investors can also purchase bitcoin through other mobile payment apps, incorporating PayPal, Cash App and Square.
“Covid-19 hyper-charged the growth of bitcoin,” Matta said. “I think this would’ve happened to bitcoin anyway; it condign may have taken a few more years to get to this point.”
— CNBC’s Hugh Son contributed to this report.
Correction: A separate bitcoin surged from under $1,000 to nearly $20,000 in 2017. An earlier version misstated the year. This fable was updated to reflect the NFL’s comments on the matter.