After the implosion of the Silicon Valley Bank, the price of Bitcoin has surged and businesses around the world are restrategizing their finances as a result.
Billionaire venture capitalist Tim Draper has published a list of recommendations for businesses in the new macro climate, where he advises companies to keep part of their cash in Bitcoin to cover salaries.
Tim Draper Tells Businesses To Payroll In Bitcoin
Things are getting very complicated for Silicon Valley Bank’s business customers. Big tech companies with millions and billions of dollars in the bank are suddenly worried about their deposits.
This led to diversifying or moving to bigger banks, which were considered safer, and a huge rally in Bitcoin from $20,000 to $28,000 in two weeks. Businesses feel insecure about their money in ways they don’t understand, leading to uncertainty.
Billionaire investor Tim Draper has show some strategies He suggested that it could allow businesses to better position themselves in the midst of continued problems in the banking sector.
Among them, it includes keeping “at least 6 months in short-term cash” split between local and regional banks, and “at least two payrolls worth of cash in Bitcoin and other crypto currencies.”
Draper's target for BTC | BTCUSD on TradingView.com
Are Companies Moving Cash To Crypto?
The idea behind the crypto-related recommendations is that even if businesses cannot access money from banking institutions, they can at least cover their salaries for two pay cycles.
This is especially important for technology companies in the Silicon Valley region, where in the state of California the CEO of a company and other officers can be held personally liable for unpaid wages.
Salary costs can be substantial and require access to liquid funds. For example, Google in 2022 will have more than 190,000 employees, with an average salary of $133,000 per year according to data. If there is no variation in these numbers, two weeks of salary will be $971 million, while two months will be $4.12 billion.
Many employees are paid weekly, at least $1.9 billion per pay cycle. And that’s just one size of the major tech companies. If businesses are right to listen to Draper, the amount of money that can flow into Bitcoin and crypto will be incredible.
And why don’t they listen? Draper is a venture capitalist who has made winning bets on Coinbase, Twitch, Tesla, Twitter, and Robinhood. Could this be why Draper expects Bitcoin to surpass $250,000 per coin?