Tim Draper, an American venture capitalist, advised business owners to brace themselves for “more and more” bank failures if the government keeps “printing money and whipsawing interest rates.”
Tim Draper, an American entrepreneur and venture capitalist, advised creators to store at least two payrolls’ worth of cash in Bitcoin.
In reaction to the uncertainties brought on by the failure of Silicon Valley Bank, several proposals for diversification were made, including $27,739 or alternative cryptocurrencies (SVB).
Tim Draper said that Bitcoin is a hedge against a “domino run” on the banks and oppressive government intrusion in a paper aimed to business owners on March 25. He also said that firms “can no longer rely” on a single bank or governing body to manage their funds.
Draper advised business owners to have two distinct bank accounts, one with a local bank and the other with an overseas bank, with a minimum of “6 months of short-term liquidity.”
Businesses ought to have at least two payrolls’ “worth of cash” in Bitcoin and other cryptocurrencies, he added.
Draper claimed that these precautionary measures were required because governments are now assuming control of banks for the “first time in many years” and that governments are “at risk of going bankrupt.”
He added that after SVB and other banks closed, “several entrepreneurs” came to him for immediate assistance.
Draper also stressed the value of contingency preparations, noting that boards and management are in charge of keeping payroll deadlines on track “even in times of crisis.” Added him:
“It is important to build out contingency plans for bank failures that could happen more and more often if the government continues to print money and whipsaw interest rates to counteract inflation caused by the over-printing of money.”
Draper warned founders against the possibility of fraud, pointing out that scammers are adept at spotting and taking advantage of systemic flaws.
Also, he counselled entrepreneurs to confirm with all parties concerned anytime there is a change in wire instructions or a new approval procedure in order to avoid phishing theft.
This follows recent reports that Draper played a song he wrote himself on bitcoin after giving the keynote address on March 22 at Paris Blockchain Week 2023.
The song, according to him, is dedicated to SVB as well as “all the failed and failing banks.”
When the crowd gave the song a round of applause, Draper said that the blockchain, Bitcoin, and smart contracts represent one of the “biggest revolutions in the history of the world.”