BTCS Offers Bitcoin Dividends But Experts Say Buy BTC Directly

[ad_1]

BTCS Inc., a blockchain technology and infrastructure company, announced on Wednesday that it will offer the “very first dividend payable in bitcoin by a company listed on the Nasdaq.”

Dubbed the “Bividend” by BTCS, the company said it would pay a dividend of five cents per bitcoin share to its investors based on the price of bitcoin on the ex-dividend date of March 16. Shareholders would be paid on March 17. If they wish, they have the option of receiving the dividend in cash instead.

Following the announcement, BTCS shares surged on Wednesday. The stock was up nearly 44% at the close.

However, financial experts warn against buying a stock because of the hype surrounding it or its dividend.

“If you want to own this business, then own this business,” Ivory Johnson, Chartered Financial Planner, Chartered Financial Consultant and Founder of Delancey Wealth Management, told CNBC Make It. “But if you want to buy bitcoin, then buy bitcoin. Don’t buy that to get bitcoin.”

When buying stocks, your decision should be based on the fundamentals of the business itself, he says.

Although Douglas Boneparth, certified financial planner and chairman of Bone Fide Wealth, thinks the bitcoin dividend is “cool,” he agrees with Johnson that this is no reason to buy the stock.

“Learn more because you are primarily investing in the business and its future cash flow,” Boneparth, who has invested in bitcoin since 2014, told CNBC Make It.

While he thinks the “Bividend” is a “really good bridge” for direct bitcoin ownership, “to jump into it just because it’s happening is to jump on a feature, not necessarily the product. “he said. “You would always approach this as you would any other investment.”

If the shareholders decide to go for “Bividend”, they would be responsible for providing their own bitcoin wallet and securing that wallet, which is no easy task.

In addition, shareholders would need to take a few additional steps, including completing a form with the United States Securities and Exchange Commission (SEC), which would require disclosure of their name, social security number, and address. of the Bitcoin wallet.

Ultimately, the “Bividend” itself “shouldn’t spark the interest” of investors, Johnson says.

Overall, financial experts consider cryptocurrencies like bitcoin to be very risky, speculative, and volatile assets. Whether you invest in bitcoin directly or indirectly through some other means, experts recommend investing only what you can afford to lose.

Financial experts also warn against any attempt to select stocks and synchronize the market. It is risky and generally not a reliable way to build wealth. It is extremely difficult to choose stocks that will outperform the market, and even more difficult to do so consistently over time.

It is generally best to invest in index funds, which offer automatic diversification and are generally inexpensive. Index funds also tend to outperform actively managed funds.

Overall, “you shouldn’t buy a stock because it pays a bitcoin dividend,” Johnson says.

Sign up now: get more information about your money and career with our weekly newsletter

Do not miss: Ray Dalio: Allocating up to 2% of your wallet to bitcoin is reasonable

[ad_2]