It has been a roller coaster of a season for Beckham Jr., and the ride only continues as the Rams prepare to play in the playoffs. When Beckham first announced the deal, the value of the digital currency was worth more than double what it is now.
Beckham is not the only athlete whose salary is partially paid out in cryptocurrencies. As the market collapses, some athletes have decided to take part of their salaries in the virtual currency, which is starting to look like an interesting financial decision.
Beckham signed on with the Rams in November and announced that he would be taking his salary in the virtual currency, which was worth around $64,000 at the time. It reached its all-time peak in November at $69,000, but sank to $33,000 earlier this week, less than half of the November value. Beckham's original salary is down to $400,000 before tax, but it is back up to $36,000 today.
With federal and state taxes adding up to 50 percent on the original distribution, former ESPN analyst (and Martin Luther King enthusiast)Darren Rovell estimated that Beckham's salary with the Rams this season will come out to around $35,000.
The situation is assumed to be a worst-case scenario because Beckham received a lump sum when the deal was initially made and invested it all into Bitcoin. If the Rams continue to move forward in the playoffs, Beckham will receive hundreds of thousands of dollars in bonuses for divisional, conference, and national championship wins. Financially, he'll be fine, but it's still an interesting trend to examine and question whether this severe drop in the market will affect future athletes' decisions to imitate Beckham, Rodgers, and Thompson.
Though there is some risk in stock options, shares, and more traditional investments as partial compensation,cryptocurrencies is a far more volatile speculation due to its relative newness and a virtual lack of federal regulation. For professional athletes of this stature, their existing net worths can be used as a safety net to take risks. The examples made out of these athletes may serve as a cautionary tale if the market doesn't bounce back, as an encouragement to wait out your investments.
The S&P 500 and the Nasdaq are both down from the start of the year, but have not dropped as much as Bitcoin. Beckham hedged his bets on cryptocurrencies. It might look dumb right now, but there is a chance it will be brilliant in a few years. A chance is not a guarantee. If they are in it for the long haul, it would be a good time for athletes to invest at a low buying price.
I'm not an expert, so I'm not going to make a statement on whether or not it's a sustainable investment. Beckham and Rodgers collaborated on a Cash App that gave away the equivalent of $1 millionUSD in Bitcoins to fans, but they lost money on it. There are some things that need to be said.
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