Last night, popular rapper Megan Thee Stallion made Bitcoin a trending topic when she gave away $1 million to random fans via CashApp.
Fans were, needless to say, thrilled at being blessed with some extra scratch in their bank accounts ahead of the holiday season.
And while she didn’t give any financial advice, Megan Thee Stallion said Bitcoin was the “wave of the future.”
According to Black Girls Nerds, those who received the cryptocurrency had the choice of either keeping it and watching the value grow, or trading it in for cash. The promotion was part of a larger rollout of a new CashApp feature called $cashtag, which allows Bitcoin to be easily sent (as opposed to going through the arduous process of transferring money to a long “wallet” address).
Oz Sultan Weighs In On Megan Thee Stallion And Bitcoin — What Does It Mean For The Future?
Oz Sultan is a blockchain and technology consultant who runs his own firm, PAC Global, and ran for the State Senate in New York under the Republican ticket. To him, Square (the parent company of CashApp, NYSE: SQ)’s use of the “WAP” rapper in their promotions makes perfect sense.
“Square already invested $50 million in Bitcoin, so the Megan Thee Stallion promotion makes a lot of sense,” he said, exclusively. “What they’re trying to do is to drive radical user engagement in rapid fashion, within urban market segments, that are more likely to be utilizing CashApp instead of a traditional banking solution. CashApp doesn’t have monthly fees and owners charge is simply for maintaining accounts, so it’s more used by minority communities, who are more likely to be underbanked or not banked at all.”
At this juncture, it’s unclear whether this promotion will lead to greater use of Bitcoin — or other cryptocurrencies — amongst minority populations and the underbanked. However, Sultan feels that for those who already have Square stock, they’ll be seeing a great return on their investment.
“Square has also committed itself to greener bitcoin mining, the impact of which is yet to be seen — but the ability for announcements like this too short term impact the value of their stocks is reasonably significant within a few dollars,” he said.
As of this writing, Square stocks are holding steady at $232/share, with an opening high of $235. It closed yesterday at $230/share, putting it at about a 1.5% increase. However, Investor’s Business Daily lists Square as one of the top 8 fastest-growing stocks in the United States today. Some estimates, in fact, suggest that Square can grow as much as 144% in 2021.
But Megan Thee Stallion Stopped Short Of Giving Financial Advice
One might be prone to have a discussion about the efficacy of taking financial advice from a rapper, and they’d be right. But Megan Thee Stallion didn’t give Bitcoin advice for another, perhaps more salient, reason.
“If you’ll recall about a decade ago, 50 Cent got embroiled in a bit of a stock scandal where his endorsement caused a specific penny stock to spike,” Sultan said. “Consider, too, some previous statements by Jamie Dimon on the worthlessness of Bitcoin which short-term tanked the value — right before JP Morgan made large reserve acquisitions. This is something that would be illegal inside of the regulated space, but it’s something that’s fair game inside of cryptocurrency, currently. But with cryptocurrency market speculation and commentary having market movement capacity, and being reasonably unregulated, There is a significant opportunity for companies to push market moves on their stocks, as they get more involved inside of the crypto arena.”
Sultan, however, feels that savvy financial planners shouldn’t lose the plot when it comes to this latest promotion.
The focus, he says, shouldn’t be so much on the stocks themselves, but how this promotion gives insight into the future of investing.
Gen Z doesn’t invest the way previous generations do, and Sultan urges us to pay close attention to the emerging trends.
“What the Megan Thee Stallion Bitcoin promotion really underscores here is that traditional money transfer services that have replaced a lot of utility of banks for Generation Z customers,” he said. “While they may not all become investors to any degree right now, there is a huge amount of consumer value that CashApp and Square can leverage off of this that is most likely going to make other entertainment properties interested in participating with an increasingly larger amount of cryptocurrency companies and money transfer services.”
Portions of this interview have been edited for clarity.