American venture capitalist and entrepreneur Tim Draper advised founders to hold at least two paychecks’ worth of cash in Bitcoin (BTC) or alternative cryptocurrencies in response to the uncertainty created by the collapse of Silicon Valley Bank (SVB).
In a March 25 report aimed at company founders, Tim Draper explained that Bitcoin is a hedge against a “domino run” on the banks and against excessive government intervention, adding that companies “can no longer rely on themselves.” can leave a single bank or governing body”. manage their money.
Draper suggested that business founders should 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 companies should also have at least two payslips “worth cash” in bitcoin and other cryptocurrencies.
Draper said these precautionary steps are necessary because governments are taking control of banks for the “first time in many years” and governments themselves are “at risk of bankruptcy”.
He further revealed that “many startups” asked him for “emergency help” after the SVB and other banks closed.
He also warned that boards and management are responsible for meeting payroll deadlines “even in times of crisis” and suggested that it was important to be well prepared. He noticed:
“It’s important to have contingency plans for bank failures, which could become more common as the government continues to print money and raise interest rates to counter inflation caused by money overprinting.”
He also warned that companies should remain vigilant against fraud, noting that scammers are adept at identifying weaknesses in a system and exploiting them.
In addition, he advised founders that whenever there is a change in referral instructions or a new authorization system, phishing theft can be prevented by verifying all parties involved.
Related: Silicon Valley Bank’s downfall has many causes, but crypto is not one of them
This comes after Tim Draper performed a self-composed Bitcoin song at the end of his keynote address at Paris Blockchain Week 2023 on March 22.
He explained that the song is dedicated to Silicon Valley Bank and “all the banks that have failed and will fail.”
The song received applause from the audience, and Draper ended his time on stage by saying that blockchain, bitcoin and smart contracts represent one of the “greatest transitions in the history of the world.”
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