American venture capital investor and entrepreneur Tim Draper suggested the founders hold at least two cash payrolls in Bitcoin (BTC) or alternative cryptocurrencies, along with other diversification recommendations, in response to the uncertainty created by the Silicon Valley collapse. Bank (SVB).
In a report of March 25 addressed to the founders of companies, Tim Draper claimed that Bitcoin is a hedge against a “domino collapse” in banks and overbearing government intervention, adding that businesses “can no longer trust” a single bank or government body to manage their cash.
Some tips for business cash management post SVB. https://t.co/dVEw0EJJyZ #bitcoin #trust #freedom
—Tim Draper (@TimDraper) March 24, 2023
Draper suggested that company founders keep at least “6 months of short-term cash” in two separate bank accounts: one at a local bank and one at an international bank.
He noted that businesses should also have at least two “cash worth” payrolls in Bitcoin and other cryptocurrencies.
These preventive measures were necessary, according to Draper, because for the “first time in many years”, governments are taking control of the banks, and the governments themselves are “at risk of becoming insolvent”.
Besides, revealed that “many startups” asked him for emergency help after the closure of SVB and other banks.
In addition, Draper stressed the importance of contingency plans, since boards of directors and management are responsible for meeting payroll deadlines “even in times of crisis.” And he added:
“It’s important to come up with contingency plans for bank failures that could occur with increasing frequency if the government continues to print money and adjust interest rates to counter inflation caused by overprinting money.”
Draper reminded founders to be alert to the risk of fraud, noting that fraudsters are adept at identifying weaknesses in a system and taking advantage of them.
Additionally, to prevent phishing theft, he advised founders to check with all parties involved whenever there is a change in transfer instructions or a new approval system.
This comes on the heels of recent news that Draper performed a self-composed song about Bitcoin following his keynote speech at Paris Blockchain Week 2023 on March 22.
He said the song was dedicated to SVB and “all the banks that have failed and will fail”.
The song received a round of applause from the audience, with Draper concluding his time on stage by saying that blockchain, Bitcoin and smart contracts constitute one of the “greatest transitions in the history of the world”.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.