Cash dividends are so last year.
A blockchain infrastructure company will break new ground in March when it issues its first Bitcoin dividend to shareholders. BTCS Inc. announced Wednesday that it would become the first Nasdaq-listed company to distribute a dividend payable in the world’s largest cryptocurrency.
Stockholders of record — those who hold their BTCS stock with the company’s transfer agent — will receive a “Bividend” worth $0.05 in Bitcoin for every share of company stock they own. Investors who do not elect to receive a Bividend will receive a cash dividend of equal value, the company said.
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“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,” Charles Allen, chief executive officer of BTCS, said in a press release.
“In the crypto space BTCS has a long history of firsts, including being the first pure-play U.S. public company focused on cryptocurrencies and blockchains, the first U.S. public company to mine Bitcoin,” he continued. “Now, we are the first Nasdaq-listed company to pay a Bividend, a dividend payable in Bitcoin at the option of our shareholders.”
What Is a Dividend?
Dividends are a type of compensation that companies or funds periodically pay to shareholders. Rather than reinvest profits back into their business, some companies pass a portion of these profits on to their shareholders in the form of dividends.
Dividends are typically paid in cash or additional stock. A company’s board of directors determines the size of dividends and when they should be paid to investors. These payments are usually distributed on a monthly, quarterly or yearly basis, although some companies may additionally issue one-time payments known as special dividends.
It’s important to remember that an investor who only recently purchased a dividend-paying stock may not automatically qualify for the company’s next payout. Eligibility is determined by the stock’s ex-dividend date, the day on which eligibility for the next dividend expires. Those who buy stock after that date won’t receive the next dividend.
How the BTCS Bividend Works
BTCS will pay out its Bividend on March 17. While there is no minimum number of BTCS shares needed to qualify for the Bividend, shareholders will need a Bitcoin wallet to receive their payment.
However, not all BTCS shareholders will be eligible for the dividend. Only those who hold their stock with Equity Stock Transfer, the company’s transfer agent, will receive the Bividend. Investors who hold their shares with a brokerage firm are considered “beneficial owners,” not shareholders of record, and will need to move their shares to Equity Stock Transfer.
Shareholders of record are also required to opt into the payment by the ex-dividend date of March 16. To do so, shareholders must fill out paperwork accessible on bividend.com. Those who do not opt in will receive a cash dividend instead of Bitcoin.
An eligible investor with 1,000 shares of BTCS stock would receive $50 in Bitcoin through the dividend. With the cryptocurrency trading at approximately $43,300 on Thursday, that would equate to just 0.0012% of a Bitcoin.
The company did not indicate whether future Bividend payments will be paid or whether this is truly a one-time offering. “BTCS is very much in the growth phase. That said, the Company is evaluating the appropriateness of future Bividends,” the company said in the press release.
Bottom Line
BTCS, a blockchain technology company, announced this week it would offer a Bitcoin dividend in March, marking the first time a Nasdaq-listed firm will do so. The dividend, which the company refers to as its “Bividend,” will be distributed to shareholders of record – those who hold their stock with the company’s transfer agent. Eligible shareholders will receive $0.05 in Bitcoin for every share of BTCS stock they own.
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