Last year, companies were forced to scramble to find workers. After years of taking people for granted, the pandemic has turned the job market upside down. There were around 11 million jobs available, but few people willing to take them on.
In order to attract and recruit talent, companies have had to make fundamental changes. They offered higher salaries, tuition bonuses, remote, hybrid and flexible ways of working, one-on-one mentoring, and free tuition. Even with these accommodations, the seats remained vacant.
There is another sweetener that some companies are considering attracting people to join their business: paying in Bitcoin and cryptocurrency. In 2021, we’ve seen digital assets go parabolic. The number of new crypto projects and the incredible increase in the value of the asset class have caught the attention of America and the world.
For some people, buying digital assets was seen as a hedge against the devalued US dollar due to rising inflation and questionable policies from the Federal Government and Federal Reserve. Other people, especially young people, viewed cryptocurrencies as a YOLO (you only live once) trade that could make them rich quick.
Burdened with heavy debt payments for tuition fees, sky-high prices for apartments and houses, coupled with alarming inflation rates pushing up the prices of everything, digital assets seemed the only way to get ahead financially.
If you get paid in US dollars, as inflation rises, the value of your paycheck goes down. Recent data from the Bureau of Labor Statistics highlights rising costs. The consumer price index in September rose 5.4% in 2021. The growth has been so fast and furious that the US government has called for an almost 6% increase in the cost of living for people benefiting from it. social security. This is the biggest hike in four decades.
The sad reality is that if you haven’t received a big raise in 2021 and inflation stays the same or continues to rage, you will actually see a pay cut. This does not mean that the company pays you less, it is that the purchasing power of your salary is no longer the same value as it once was. It’s like a race in which you stand still and everyone passes you. Every dollar you own is devalued and it takes more money to buy the same products than it did about a year ago.
We are seeing signs of a change in payments. Miami Mayor Francis Suarez said he would take a “100% Bitcoin” paycheck and also offer cryptocurrency to public sector employees. Eric Adams, the new mayor of New York, has also announced that he plans to pay people in Bitcoin and other digital assets, and will accept his first three paychecks in Bitcoin. Sports stars “Russell Okung, Odell Beckham Jr and Aaron Rodgers all said they would be paid at least in part in crypto,” according to Bloomberg.
With the rise of remote working and employees now doing their jobs in the United States and around the world, businesses are turning to third-party vendors to help them manage payments, taxes, and compliance with local jurisdictions. Alex Bouaziz, co-founder and CEO of Deel, a company that handles these issues, offers to pay employees and contractors with crypto. Deel can make payments directly to bank accounts, digital wallets including PayPal, Payoneer, and Revolv, or directly to the person.
If you are accepting a crypto salary, you need to have a strong stomach and be comfortable seeing big gains as well as frightening drops in value. Paying in cryptocurrency is not without risk. There is a lot of volatility in this space.
In 2021, the price of Bitcoin hit $ 67,000 and then plunged below $ 30,000 and then rebounded again. Ethereum hit record highs of around $ 4,800 on December 1, only to see it trading at around $ 3,600 to $ 3,900. If you have been paid in Bitcoin, Ethereum, or other coins at a high point then the price has cratered, you will owe taxes based on the higher value you received.
For people who strongly believe in the future of cryptocurrencies, open to volatility and risk, have a long-term time horizon, paying Bitcoin can be an exciting new way to improve your wealth.