Every day, new financial products are added to the bitcoin market. The introduction of various crypto-based goods on platforms that have been there for decades is one way to get the sector into general awareness. Bividends is the most recent development in this field.
BTCS, a firm specialising in blockchain technology, has developed the concept. As much as 67% of BTCS’s value jumped on Wednesday after the business revealed plans to pay its shareholders a dividend in bitcoin.
For the first time ever, a corporation has paid a bitcoin dividend, or “bividend.” to its shareholders. By temporarily withdrawing shares from its tradeable float, BTCS hopes to encourage the use of cryptocurrencies, expand its shareholder base, reward existing owners, and tighten its float.
To better understand Bividends, we must first delve into what a dividend is.
What is a Dividend?
In layman’s terms, companies and investment funds pay dividends (share of earnings or profit made) to shareholders on a regular basis. While many businesses choose to reinvest their earnings back into the business, others choose to pay dividends to their shareholders instead.
Dividends are often given in cash or more equity. The board of directors chooses the amount and frequency with which dividends should be paid to shareholders. Monthly, quarterly or annual dividends are the most common distribution schedule, but some corporations can provide one-time payments known as special dividends.
Investors should keep in mind that they may not automatically be eligible for the next dividend payment if they only recently acquired a dividend-paying investment. Eligibility is established by the stock’s ex-dividend date, which is the day on which dividend eligibility ends for the next year. Those who buy stock after that date will not be eligible for the subsequent dividend.
So what’s Bividends by BTCS?
BTCS aims to pay out its Bividend on March 17. For the Bividend, no minimum BTCS shares are required. However, stockholders will need a Bitcoin wallet to access their reward.
The dividend, however, would not be available to all BTCS owners. In order to get the Bividend, you must have your stock held by Equity Stock Transfer, which is the company’s transfer agent. Investors who own their shares through a brokerage firm are referred to as “beneficial owners,” not shareholders of record, and must transfer their shares through Equity Stock Transfer.
The ex-dividend date for this payment is March 16, and shareholders of record must opt-in to receive it by that date as well. To do so, stockholders must fill out papers accessible on bividend.com. Those who choose not to participate will be paid in cash instead of Bitcoin as a dividend.
For every 1,000 shares of BTCS stock held by a qualified investor, $50 in Bitcoin will be paid out as a dividend.
The firm made no mention of future Bividend payments or whether this is genuinely a one-time transaction. “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.
BTCS secures the top Layer 1 blockchains that power DeFi, NFTs, and Metaverse ecosystems such as Ethereum, Avalanche, and Cardano.
Additionally, the firm is building a digital asset platform that will enable customers to aggregate crypto portfolios across various exchanges, track cumulative performance, and gain analytical insights. The platform is currently scheduled to launch in 2022.
The introduction of dividends in bitcoin further narrows the gap between the traditional market and the cryptocurrency industry. This also lays down the foundation for further innovation in this area.Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.