The recent crypto crash has taught countless people to be wary when dealing with volatile digital assets. For Klay Thompson and Andre Iguodala, it might be a costly lesson as they can reportedly lose millions' worth of salary due to the sharp drop in Bitcoin's (BTC) value.
"In January of this year, Andre Iguodala and Klay Thompson signed up to receive a portion of that year's salary in Bitcoin," wrote Marcin Dragunov of Crypto Mode. "This was done in conjunction with Cash App, a digital bank. The championship team athletes were to receive their BTC tokens through the app in celebration of its new trading options; to buy and sell cryptos."
When the Golden State Warriors stars signed the agreement in January, BTC was still valued at nearly $35,000. There was a widely held belief that the cryptocurrency would grow more. After all, its all-time high value was $68,000, which it hit just a few months prior.
Thompson and Iguodala shared this belief via separate tweets.
According to Buy Bitcoin Worldwide, Iguodala received $2.647 million of his salary in BTC. If the digital currency's value now (around $16,000) is less than half of what it was in January, then the former Finals MVP could have lost more than $1.4 million per Crypto Mode's calculation.
As for Thompson, the portion of his salary invested in BTC was undisclosed. But considering that his contract is significantly higher than that of his Warriors teammate, there is a possibility that the five-time All-Star has more money tied up in the cryptocurrency.
Looking at the bigger picture, the loss might not seem that significant for the Warriors' wing duo, especially since they have earned a lot more than their reported losses throughout the duration of their careers.
Also, one of the most important investment adages is never to put all your eggs in one basket. There is a huge chance that Thompson's and Iguodala's portfolios are hedged against extremely risky vehicles, such as digital assets.
Another possibility is that they could have already converted their coins or tokens to fiat cash before BTC massively dropped in value.
Still, there is a lesson to be had here for other NBA players and other athletes - that is to be prepared for the worst when investing in or being paid through a highly volatile currency, such as BTC.