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BTCS stock spikes 40% after offering dividend in Bitcoin

By Kevin Donovan

16:42, 6 January 2022

An ATM with a screen displaying the words 'Buy Bitcoin here'
BTCS offers a shareholder option for dividends to be paid in Bitcoin – Photo: Capital.com

BTCS stock jumped almost 70% after the “pure-play” blockchain IT company announced shareholders would have the option to receive quarterly dividends in Bitcoin and disclosed that its cash and digital asset holdings offered a break-up value 12.6% greater than its 2021 year-end share price.

BTCS stock is currently trading at $4.22 per share, up 39.7% from Tuesday’s $3.02 closing share price. In mid-morning trading Wednesday, BTSC stock traded as high as $4.95 per share. As of mid-day Thursday EDT (UTC-5), 2.07 million BTCS shares traded, versus the 1.23 million daily average trading volume.

The Bividend

BTCS announced in an 8-K filing with the US Securities and Exchange Commission (SEC) before the market opened Wednesday that it would pay a cash dividend of $0.05 per share, giving shareholders the option to take payment in Bitcoin – dubbed a Bividend – based on the conversion rate at 16:00 EDT (UTC-5) on 16 March, as reported by Yahoo! Finance.

Bitcoin currently trades at $42,945.65, according to Yahoo! Finance. BTSC’s board approved the disbursement on 2 January. The dividend will be distributed to shareholders of record on 17 March.

“With BTCS’s year-end 2021 stock price of $3.14 per share representing a 12.6% discount to the company’s digital asset holdings and cash position of $3.56 per share, or $37.8m,” the company stated in its announcement. “This is an ideal time to reward our shareholders with a non-taxable return-of-capital Bividend.”

The Silver Spring, Maryland-based company claims to be the first Nasdaq-listed public company to offer shareholders the option to receive dividends in cryptocurrency. BTCS trades over the Nasdaq exchange under the ticker BTCS.

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Shareholder opt-in to receive Bividend

This has been in the planning stage for some time, as BTCS secured the web domain name Bividend.com in 2015. In order to receive the Bividend, shareholders will have to go to Bividend.com and provide an accurate cryptocurrency wallet address as part of an opt-in agreement via DocuSign.

Additionally, in order to receive the Bividend, shareholders will have to transfer their BTCS holdings from their current brokerage account to BTCS’s transfer agent, Equity Stock Transfer.

Shareholders who take no action, or initiate the process but do not complete it, will receive their dividend in US dollars.   

“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,” said BTCS CEO Charles Allen in the same statement. “As we build an ownership base of long-term, fundamental shareholders, the payment of this special Bividend is an important step in showcasing the disruptive nature of blockchain technology.”

Read more: Bitcoin price prediction 2025: will the coin reach 0,000?

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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