Yahoo Finance’s Dan Roberts joined Yahoo Finance Live to discuss how the Carolina Panthers’ Russell Okung is the first NFL player to be paid in Bitcoin and what these means for athletes going forward.
Video Transcript
ADAM SHAPIRO: Did you know that the shares of Square are up, what, 250%, 260% this year? Dan Roberts knows that, and he’s here to tell us more about why 2020 has been really good to Square. Dan.
DAN ROBERTS: Well, Adam, it’s so interesting because this is a company that everyone knows their bread and butter are small businesses, the same kind of businesses that have been hit so hard by the pandemic. So in some ways it’s counterintuitive, but it’s a little [AUDIO OUT] story where, you know, first the pandemic killed you, and then it brought you back.
Square, you know, really had huge adoption of its Cash App, its peer-to-peer payments app, thanks to the stimulus checks, which it allowed the unbanked and underbanked to deposit those stimulus checks through the Cash App. That spurred big adoption.
Of course, in addition, we’ve talked a lot about Square as a Bitcoin play. It’s interesting. That’s gained a lot of the headlines, but the story for Square in 2020 is about a lot more than Bitcoin. Of course, it did have in Q3 its first quarter with more than a billion dollars in Bitcoin revenue. Bitcoin profits for Square still very small, $32 million.
But we had an analyst earlier on the show this morning talking about how, you know, Bitcoin is more important for Square as a reputation thing, as a customer-acquisition thing rather than an actual financial play, and it’s a low-cost move. You know, it hasn’t cost Square very much to enable Bitcoin buying and trading in its Cash App.
But really, you know, it’s all about Square as a facilitator of small-business digitization. You know, the same businesses that were so hit hard by the pandemic, a lot of them small brick-and-mortar merchants were able to quickly set up e-commerce presences which will help them emerge from the pandemic. I mean, now more than ever, it’s become obvious that if you don’t have a really good e-commerce presence, what are you doing?
So Square along with Shopify, along with PayPal, along with Stripe has been a company that has helped those small businesses digitize. I think that’s a lot of the story.
And, you know, there’s been a lot of bullish upgrades to the stock in the last six months that have basically said that beyond the pandemic, Square will be able to further gain from helping those small businesses digitize.
SEANA SMITH: Well, it certainly has been a huge winner. Like you guys said, up, what, 260% so far this year. Dan, you mentioned, I guess, some of the correlation you’re saying doesn’t have a lot to do with it, but some of Bit– or of Square’s success has to do with Bitcoin.
I want to ask you about a headline that we got out because it’s kind of like your worlds colliding here, Bitcoin and sports today, and it was coming out from the NFL Network reporting that Russell Okung– he’s an NFL player. He’s going to receive half of his salary going to be paid in Bitcoin. I guess my question to you is, is this something? Have we seen anything like this before?
DAN ROBERTS: So it’s interesting, Seana. I mean, there are a number of athletes that have been very vocal about loving cryptocurrency, but he’s kind of the first to walk the walk.
Now let’s make sure we define our terms here because I think the headlines can be a little misleading. It might make people think the NFL, you know, handed this guy half his salary in Bitcoin. What actually happened is, you know, they did it through a third party app called Strike. So, you know, the NFL gives him his salary in normal US dollars. You put it through this party– this third-party app Strike, and then he converted it to Bitcoin. But, look, it’s still kind of a major milestone.
Now you asked if anyone else has done something similar. We’ve had Spencer Dinwiddie on our “Yahoo Finance Live” programming. He’s an NBA player with the Brooklyn Nets. Last year he tried to tokenize his NBA contract. That is to sell tokens that represented shares in his NBA salary, and the NBA balked at that at first, but eventually he was able to basically do what he wanted to do. A little bit different than him receiving his salary in Bitcoin, but I think the larger story that’s interesting is you have a lot of athletes kind of investing their wealth in different ways. You know, putting their money into tech startups, that was already happening. Now some of them are discovering cryptocurrency. That’s not to say it’ll all pan out, but, you know, receiving a Bitcoin is probably a safer bet than trying to launch, you know, one of those new tokens that a lot of those guys have done.
You know, a year ago Floyd Mayweather and DJ Khaled and some other sports-adjacent celebrities got fined by the SEC for pumping ICOs, Initial Coin Offerings. So what Russell Okung did here a little bit smarter right now, especially as Bitcoin is surging. But who knows what will happen to the Bitcoin price in 2021.
ADAM SHAPIRO: But he’s– but the key for him, though, is he’s the one converting. I mean, he’s getting dollars from the team, and then he’s converting. So it’s not like he’s being paid in Bitcoin.
DAN ROBERTS: Well, that’s right. He converted half his salary immediately to Bitcoin. So a good investment for him maybe. He believes in Bitcoin. But again, not quite the same as the NFL buying Bitcoin and handing it to a player. Maybe that’s the next step if the players request it.
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