The American venture capital investor and businessman Tim Draper is advised to establish at least two payrolls worth of cash in Bitcoin (BTC) or alternative cryptocurrencies, along with other diversification recommendations, in response to the uncertainty created by the collapse of Silicon Valley Bank (SVB).
On March 25th report directed at business founders, Tim Draper stated that Bitcoin is a hedge against the “domino run” in banks and overbearing government intervention, adding that businesses “can no longer depend” on a single bank or governing body to manage cash.
Some tips for business cash management post SVB. https://t.co/dVEw0EJJyZ #bitcoin #trust #freedom
— Tim Draper (@TimDraper) March 24, 2023
Draper advised business founders to keep at least “6 months of short-term cash” in two separate bank accounts – one with a local bank and the other with an international bank.
He noted that businesses must also have at least two “cash” salaries in Bitcoin and other cryptocurrencies.
These precautionary measures are necessary, according to Draper, because for “the first time in many years,” the government is seizing control of the bank, and the government itself is “at risk of bankruptcy.”
He further revealed that “many startups” requested emergency help from him after SVB and other banks closed.
In addition, Draper stressed the importance of contingency plans, as the board and management are responsible for meeting salary deadlines “even in a crisis.” He added:
“It is important to build a contingency plan for bank failures that can happen more often if the government continues to print money and whipsaw interest rates to fight inflation caused by money printing.”
Draper warned founders to be alert to the risk of fraud, as fraudsters are skilled at identifying weaknesses in systems and exploiting them.
Furthermore, to prevent phishing theft, he advises founders to verify with all parties involved when there are changes in cable instructions or a new approval system.
related: The collapse of Silicon Valley Bank has many causes, but crypto is not one
This comes after recent news that Draper performed his own Bitcoin song after his keynote speech at Paris Blockchain Week 2023 on March 22.
He said the song was dedicated to SVB and “all banks that have failed and will fail.”
The song received a standing ovation from the audience, with Draper summing up his time on stage by saying blockchain, Bitcoin and smart contracts are creating one of the “greatest transitions in the history of the world.”