Making it rain, crypto style

Professional athletes request to be paid cryptocurrency

Some of the highest paid athletes are being paid in cryptocurrency and several more are requesting to be paid in Bitcoin (BTC). Some crypto companies have even begun offering endorsement deals including digital currency. So what exactly is cryptocurrency and why are athletes and franchises making the switch?

What is cryptocurrency?

Cryptocurrency is digital money that is based on blockchain technology — Bitcoin and Ethereum are the most well-known currencies but there are over 10,000 being publicly traded. Unlike the U.S dollar, cryptocurrencies have no authority that maintains or manages it’s value. They are purchased using real currency and can be exchanged online for profit similar to stocks or used to purchase goods and services — in this case they are being used to pay athletes. Companies are beginning to sell their own cryptocurrency which are usually known as tokens.

Crypto in the sports world

In 2020, free agent Russel Okung became the first professional athlete to be paid in Bitcoin. He requested that half of his $13 million salary be converted to crypto. Okung was believed to be the highest paid player in the NFL in 2020 when the value of Bitcoin nearly doubled soon after he received his salary — Okung’s invested $6.5 million was quickly worth more than his entire salary.

Okung was not the first athlete to request portions of his salary in cryptocurrency. However, he was the first successful one. In 2019, NFL quarterback Matt Barkely requested the Bengals pay his contract in BTC. His request was denied due to potential balance sheet issues for the franchise.

Several franchises and companies struggled to maintain Bitcoin and other cryptocurrencies on their balance sheets. Cryptocurrency is counted as an intangible asset, meaning that its balance may be reduced over time and if its price were to rise it couldn’t be recorded until it’s sold. Due to this inconvenience, franchises are hesitant when players request to convert their salaries and other compensations into cryptocurrency. Recently, rules have changed and the sports world wants to invest in cryptocurrencies.

Professional leagues around the United States will soon be using and accepting cryptocurrencies for things like ticket purchases and signing free agents.

The Sacramento Kings became the first team to accept bitcoin as a means of exchange in 2014 and have announced that they will allow players, coaches and staff to be paid in bitcoin.. The Dallas Mavericks, who recently partnered with the crypto company Voyager, announced they would begin accepting bitcoin to purchase merchandise and game tickets.

Mavericks owner Mark Cuban said that he believes once teams start recording bitcoin on their balance sheets then payment options will become more accessible for players. The Oakland Athletics recently hopped on the crypto train too, when they announced they would accept a single bitcoin in exchange for suites the entire season, no matter how much the value fluctuates..

Future of crypto in the sports world

Okung made a breakthrough in 2020 and inspired other franchises and players to begin participating in the world of cryptocurrencies. Franchises all over the major leagues have began offering cryptocurrency as compensation for players and staff. BTC has been around for nearly 14 years and has become extremely prominent in the world over the past five years — the future of crypto is unfolding before our eyes in the sports world with major players signing their contracts and receiving cryptocurrency.

Saquon Barkley of the New York Giants will receive 100% of his endorsement money in bitcoin, according to Joe Pompliano, host of the Best Business Show. Quarterback Trevor Lawrence of the Jacksonville Jaguars partnered with Blockfolio and will receive a crypto signing bonus. Sean Culkin of the Kansas City Chiefs will receive his entire salary in bitcoin.

Athletes and franchises are taking the risk of making a profit or losing money. The future is here in the world of sports and before we know it, all athletes will be using bitcoin or another form of cryptocurrency to receive endorsement money or their salaries.