It's a bet that has so far turned sour.
Many stars, especially from the National Football League and top politicians like the mayors of Miami and New York have gambled on getting paid in bitcoin and ether, the top two cryptocurrencies by market value.
But the rout in the crypto market, which has lost more than $1.2 trillion since its highs in early November, has significantly affected their payroll.
Bitcoin, which hit $69,044.77 on Nov. 10, has lost more than 44% of its value and is currently trading around $38,530.44. The same goes for ether, the native currency of the Ethereum blockchain, which has fallen from $4,878.26 on November 10 to $2,685.68 at the time of writing.
Eric Adams, the new mayor of New York, who wants to make the financial capital a major cryptocurrency hub in the face of competition from Miami and other cities, has announced with fanfare that his first three payrolls will be in crypto.
On Jan. 20, Adams converted his first check into bitcoin and ether.
But the same day, bitcoin lost 10% of its value.
To accelerate the adoption of cryptocurrencies by the general public and attract technology firms, Francis Suarez, the mayor of Miami, announced in November that his pay will be "100% in bitcoin". It seems that it was not a good bet.
Temporary Losses ?
"It may certainly lessen overall enthusiasm in the meantime but without a doubt there will be another batch of loyal long term holders this thing around after seeing how crypto recovered yet again from the 2018-2019 winter," said Bill 'Swo' Lee, adviser at FriesDao, a decentralized autonomous organization. "Historically we have never seen bitcoin drop below the prior bull cycle’s all time high after each halvening."
It's for some athletes that the collapse in the value of bitcoin does the most damage as many sports stars have either converted their juicy endorsement deals to crypto or are only getting paid in crypto. This is the case of Odell Beckham Jr., the wide receiver of the Los Angeles Rams.
After Beckham was released by the Cleveland Browns in November and signed by the Rams, the star said that he was partnering with Block's (SQ) financial Cash App, which offers to buy and sell bitcoin. Beckham then said he would accept his $4.25 million one-year salary in bitcoin. In November, bitcoin was at its all-time high.
The losses are even deeper for Trevor Lawrence, the Jacksonville Jaguars quarterback and future face of the NFL, who has placed his $24 million signing bonus in a cryptocurrency account with Blockfolio, a crypto firm.
As for the star of the New York Giants Saquon Barkley, he decided to invest its eight plus figures in terms of marketing and sponsorships into bitcoin to build a "generational wealth".
"I will be taking my marketing money into Bitcoin," Barkley said in an appearance on the Best Business Show with influencer Anthony Pompliano on July 14. "I think it's just be the smart thing to do and the right thing to do to start taking my investment money into bitcoin."
The first to take the plunge was a Carolina Panthers player Russell Okung, who took to Twitter in May 2019 to ask to be paid in bitcoin.
His wish was finally granted by the Carolina Panthers who paid him half of his $13 million salary in bitcoin in December 2020.
Cryptocurrencies are, analysts warn, a very volatile asset.
