American venture capital investor and entrepreneur Tim Draper advises founders to keep at least two bitcoins worth of cash Or alternative cryptocurrencies, among other diversification proposals in response to the uncertainty surrounding the collapse of Silicon Valley Bank (SVB).
In a March 25 report for business founders, Tim Draper said bitcoin is a hedge against bank "domino runs" and overbearing government intervention, adding that businesses "can no longer rely" on a single bank Or governing bodies to manage their cash. Draper advises business founders to keep “at least six months of short-term cash” in two separate bank accounts one at a local bank and one at an international bank.
Businesses should also have at least two payrolls with “cash equivalents” in bitcoin and other cryptocurrencies, he noted. According to Draper, these precautions are necessary because, "for the first time in many years," the government is taking control of the banks while the government itself is "at risk of insolvency."
He further revealed that “a lot of startups” have come to him for emergency relief after SVB and other banks collapsed. Additionally, Draper emphasized the importance of contingency planning, as boards and management have a responsibility to meet payroll deadlines "even in times of crisis." He added:
"It is important to have contingency plans for bank failures, which could become more frequent if the government continues to print money and drag interest rates to offset the inflation caused by excessive money printing." Draper cautioned founders about the risk of fraud, noting that fraudsters are good at identifying weaknesses in systems and exploiting them.
Additionally, to prevent phishing theft, he advises founders to check with all parties involved whenever there are changes to wire transfer instructions or a new approval system. It was previously reported that Draper performed a self-written Bitcoin song after his keynote address 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 drew rapturous applause from the audience, and Draper concluded the stage by saying that blockchain, Bitcoin and smart contracts constitute one of the "greatest transformations in the history of the world."
