In a first of its kind move, BTCS,the Nasdaq-Listed US-based publicly traded blockchain infrastructure and analytics company has become the first in the world to offer dividends payable in bitcoin (BTC) to its shareholders.
As per announcement from BTCS, the company will give investors the option to receive their dividends paid in bitcoin later this year, stating “cryptocurrency adoption and financial freedom” is paramount to the company’s ethos.
Immediately after this announcement, shares of BTCS on the Nasdaq stock exchange jumped almost 40% in a matter of just 15 minutes after the market opened for trading on Wednesday, 5th January,2022. As of 09:42 ET (14:42 UTC), the stock stood at USD 4.23, up from a previous day’s closing price of USD 3.03.
The company introduced an interesting coinage “Bividend” for the bitcoin dividend. This “Bividend” will be based on bitcoin’s US dollar market price as of the ex-dividend day as per company announcement which started developing infrastructure for blockchain technologies since 2014.
BTCS said it intends to pay a dividend of USD 0.05 per share, with the ex-dividend date being March 16 this year. This implies that anyone who wishes to receive a dividend in BTC must become a shareholder of BTCS before that date.
Existing shareholders, meanwhile, will have until March 17 to opt in to receive the dividend in BTC. Those who do not opt in will instead receive the same amount paid in US dollars, the firm said.
“We want to reward our long-time shareholders for their continued support and encourage financial freedom by providing the means to enable direct ownership of Bitcoin and other digital assets,” Charles Allen, CEO of BTCS, commented.
In terms of future dividend pay-outs, the company did not promise that they will be made in BTC, but said it is “evaluating the appropriateness of future Bividends.”
Another major requirement to receive bividend is to have a workable crypto wallet.BTCS has stated four steps to get the bividend credited to the customers account.
First,Become BTCSShareholder: To receive a Bividend one must be a BTCS common stock shareholder prior to the ex-dividend date of March 16, 2022.
Second,Sign Up Below And Complete Opt-In Forms: Sign up using the prescribed form to receive detailed instructions including Bividend Opt-In Agreement.
Third,Move Your Shares To Transfer Agent: Follow the detailed instructions received in Step 2 to transfer your shares to the company assigned transfer agent Equity Stock Transfer.
Fourth & Last,Receive BTCS Bividend: Sit back, relax and receive the first ever Bividend!.
As indicated by BTCS, holding Bitcoins on its balance sheet is valuable but serves no useful purposes. They accept that Bitcoin is a non-productive asset that is simply lying in wallets without much utilities. They also state that it does not create money, which has traditionally been the aim of a publicly traded firm. However, the idea of Bividend could solve this by putting the asset for some productive use. The idea is more like a capital return than dividend that is advantageous for shareholders for being tax-free. Further, it has the appearance of a share repurchase, which adds to its credibility. For BTCS, it would be putting Bitcoin to good use while also making it a productive asset similar to Ethereum or any other altcoins.
It is expected that a lot of other companies will follow suit. Given the craze around cryptocurrency and altcoins and ever increasing interest in digital currencies it may become a successful proposition. If the zooming share prices of the BTCS and the buzz around the announcement of Bividend is anything to go by, a lot of other companies would like jump into the bandwagon of Bividend to reap rich dividends for themselves.