Apparently "bividends" are going to be a thing now.
BTCS (BTCS, $4.36), a self-proclaimed blockchain technology-focused company, on Wednesday announced the first-ever dividend payable in bitcoin by a Nasdaq-listed company.
And while it might be contradictory in nature to the purpose of traditional cash dividends, you can probably still expect more bividends to pop up from other companies down the road.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The BTCS "Bividend"
BTCS intends to pay shareholders of record a one-time dividend of 5 cents per share in bitcoin, based on the bitcoin price on the ex-dividend date. Investors who do not elect to receive the bividend in bitcoin will receive a cash dividend of 5 cents per share.
"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,” CEO Charles Allen said in a press release.
Before you can say "make it stop," know that plenty of crypto-commenters have already begun poking holes in the premise of paying dividends in bitcoin.
For one thing, above all else, bitcoin and cryptocurrencies in general are attractive primarily as speculative assets. Traders love them for their volatility and return potential.
No one buys bitcoin for its future cash flow because bitcoin has no future cash flow. Buying bitcoin for income – that is, for the dividends, which are paid out of cash flow – makes even less sense.
And this is a one-time dividend to boot.
A Stunt? Possibly. But Bividends Might Be Here to Stay
All you really need to know, in the words of Bloomberg's Matt Levine, is that BTCS "is a somewhat unloved micro-cap company," but it did pull off an effective marketing trick. After all, BTCS shares popped more than 40% the day of the news drop.
"A bividend is a terrible name but an obviously good meme-y crypto stunt to increase attention," Levine writes. "BTCS will pay about $500,000 in bividends, which bought it about $15 million of market cap. Just a good trade!"
But also be aware that BTCS stock is still off nearly 50% since its September Nasdaq debut. Its market cap, at less than $45 million, remains pitiable. And its daily average volume of 1.2 million shares reveals a distinct lack of interest among market participants on most trading days.
Where this gets interesting – or maddening, depending upon your point of view – is that BTCS is unlikely to be the last issuer of a crypto dividend. That's because, if nothing else, BTCS' move worked remarkably well as an attention-getting device. Somewhat regrettably, we're talking about BTCS in this post right now.
But the firm's one-time bitcoin (or cash) payout doesn't change the investment thesis on BTCS stock (whatever that might be).
As for the concept of bividends more broadly, it stands to reason we'll see copycats – and probably plenty of them – soon enough. Suffice to say that for the time being – and then some – quaint, old-fashioned common stock dividend investors would do well to tune out this noise.
-
I'm want to give my 3 grandkids $5K each for Christmas.You're comfortably retired and want to give your grandkids a big Christmas check, but their parents are worried they might spend it all. We ask the pros for help.
-
If You're Not Doing Roth Conversions, You Need to Read ThisRoth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us?A retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
If You'd Put $1,000 Into Coca-Cola Stock 20 Years Ago, Here's What You'd Have TodayEven with its reliable dividend growth and generous stock buybacks, Coca-Cola has underperformed the broad market in the long term.
-
What Fed Rate Cuts Mean For Fixed-Income InvestorsThe Fed's rate-cutting campaign has the fixed-income market set for an encore of Q4 2024.
-
If You Put $1,000 into Qualcomm Stock 20 Years Ago, Here's What You Would Have TodayQualcomm stock has been a big disappointment for truly long-term investors.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have TodayHome Depot stock has been a buy-and-hold banger for truly long-term investors.
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have TodayBank of America stock has been a massive buy-and-hold bust.
-
If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have TodayORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
-
The Most Tax-Friendly States for Investing in 2025 (Hint: There Are Two)State Taxes Living in one of these places could lower your 2025 investment taxes — especially if you invest in real estate.
-
The Final Countdown for Retirees with Investment IncomeRetirement Tax Don’t assume Social Security withholding is enough. Some retirement income may require a quarterly estimated tax payment by the September 15 deadline.
