Historic Ether (ETH) Dividend and Bonus from BTCS: Will This Deter Short Sellers?
BTCS Inc., a leading Ethereum (ETH) treasury giant, has announced a significant move that could shake up the ETH treasury landscape. The company will be offering a one-time $0.05 per share ETH dividend and an additional $0.35 loyalty payment in ETH to shareholders who transfer and hold shares for 120 days.
This innovative move could have a notable impact on other ETH treasury players, setting a precedent as the first public company to pay dividends in ETH and introducing a new strategy to reward and retain long-term shareholders while combating short-selling.
The announcement has come at a time when BTCS Inc.'s stock has faced a heavy sell-off despite ETH's recent rally on the price charts. The company's shares have dropped by over 45% since July, from $8.5 to below $5. However, the update about the ETH dividend and loyalty payout resulted in a 10% bounce in BTCS's share price.
By paying a $0.40 per share ETH "Bividend" and an additional loyalty payment, BTCS aims to incentivize long-term investment and discourage short-selling. Other ETH treasury players might adopt similar measures to stabilize their share prices and reduce volatility caused by short-term trading and short selling.
BTCS’s move to issue dividends directly in ETH is pioneering among publicly traded companies. This could increase investor interest in BTCS compared to other ETH treasury firms, putting pressure on competitors to innovate shareholder engagement or risk losing investor attention in a crowded market of over 69 ETH treasury players.
Offering dividends and loyalty payments in Ethereum directly may signal confidence in ETH’s value and utility. Other ETH treasury players might similarly emphasize their ETH holdings as intrinsic value, potentially fostering greater demand for ETH itself as an asset held by these companies.
The loyalty payment is designed to reduce share lending for short selling by encouraging shareholders to move shares to a transfer agent’s book entry system and hold them for a defined period. This approach could inspire other ETH treasury firms to implement mechanisms to protect their shares against short-sellers, thereby supporting price stability.
BTCS currently holds 70k ETH worth $301M, making it one of the largest ETH treasuries. The overall ETH supply is being increasingly controlled by treasuries and public/Web 3 firms, with public and Web 3 firms controlling 3.4% of the overall ETH supply, while ETFs have 5.4%. Whether treasury demand will ease ETH's pullback and keep it above $4k remains uncertain.
In summary, BTCS’s $0.40 per share ETH dividend plus loyalty payout could influence other ETH treasury holders to adopt more shareholder-friendly and ETH-denominated dividend strategies as a way to attract stable investment, protect against market manipulation, and highlight the value of their ETH assets in a highly competitive environment.
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