NFL star Odell Beckham Jr. is taking a victory lap, but not on the field. The Miami Dolphins player took to X, formerly Twitter, to celebrate bitcoin's price topping $100,000 in early December.
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Back in 2021 when he signed with the Los Angeles Rams, Beckham struck a deal with Block Inc.’s Cash App to receive his $750,000 salary in bitcoin. The price was $64,158 on the day he converted it, according to The Action Network data cited by Morningstar. The website says if he moved the $750,000 sum all at once into bitcoin, it would be worth about $1,168,900 at bitcoin's current roughly $100,000 value,
At the time, it was noted how this may have not been a wise financial decision because of the virtual currency's volatility. MarketWatch asked , “how much did it end up costing him?” Indeed, the world’s most popular cryptocurrency lost 74% of its value from November 2021 to November 2022, justifying some of the critics’ concerns.
However, the recent rebound has pushed the pendulum the other way. “Soooo who said taking my Rams salary in bitcoin was dumb again?” Beckham posted on X in November.
While it is unclear whether the athlete held onto his bitcoin throughout the three-year period, it seems fair to assume his gamble paid off. He also appears to have an endorsement deal with Cash App and last month tweeted, "I’m still partnering with @CashApp to take my salary in bitcoin."
The story is reminiscent of graffiti artist David Choe’s decision to take his $60,000 payment for painting Facebook’s office in the tech giant’s stock. That was back in 2005. In 2012, Facebook went public and Choe’s stock options were worth over $200 million, according to CNBC .
Sometimes making long-term bets on assets viewed as risky can lead to enormous wealth creation. It can also turn out terribly and be extremely costly, so always take time to determine your own risk tolerance level and maintain a diversified portfolio.
If you have as much faith in Bitcoin as Beckham, here’s how you can invest.
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How to invest in Bitcoin
The first step to buying bitcoin is choosing a legitimate, registered cryptocurrency exchange. There are plenty of scam trading websites out there, so make sure to do your research.
Coinbase, Kraken, and Gemini are probably among the most popular platforms for Americans looking to buy bitcoin. You can also use the Cash App which helped Beckham receive his bitcoin payment in 2021. You can also buy bitcoin at Bitcoin ATMs but using these comes with a lot of security risks.
Once you select a cryptocurrency platform, you can connect your bank or payment card to fund the account before placing an order to purchase bitcoin. Financial experts recommend bitcoin accounting for no more than 5% of your portfolio.
Once you’ve purchased the asset, you could choose to store it in an online wallet provided by the crypto platform, but this makes you vulnerable to hackers and scammers. The safer option is to save your private key offline on a secure physical device. You can sign up for a software wallet, such as the Coinbase Wallet, or buy a hardware wallet such as the Ledger.
Beckham's decision to convert his paycheck into bitcoin instantly is a move many successful investors and entrepreneurs make. They invest first and spend what’s left over. Credit reporting giant Experian calls this “reverse budgeting.” You can use a strategy called dollar-cost averaging and buy a fixed amount at regular intervals to minimize the impact of volatility.
If you sell, convert, or spend bitcoin, remember you may owe capital gains taxes since the IRS treats virtual currencies as property for federal income tax purposes.
If you prefer not to own bitcoins directly but you do want exposure to the cryptocurrency, you can consider spot bitcoin ETFs and bitcoin futures ETFs.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
