Billionaire Tim Draper tells businesses to hold Bitcoin in the SVB aftermath

Billionaire Venture Capitalist Tim Draper I believe Businesses must hold “at least two people’s cash” in Bitcoin (BTC) or other cryptocurrencies.

Draper did not specify the percentages assigned to Bitcoin and Altcoins. However, he called BTC a hedge against worsening economic conditions.

bitcoin hedge

Draper said bank failures like Silicon Valley and Silvergate demonstrate the need for contingency plans to ensure companies always have cash on hand to sustain themselves and their employees. said. He added that the government is over-regulating and micromanaging the banking sector, undermining its long-term health.

He said companies need diversification and decentralization if they are to remain sustainable in the current economic climate. Such bank failures are more likely if governments continue to overprint money and adjust interest rates to deal with the resulting inflation.

Draper said state takeovers and lender bailouts are making governments more prone to bankruptcy, and Bitcoin offers a potential solution. He said:

“Bitcoin is a hedge against bank ‘dominos’ and poor over-regulation governance.”

He added that cryptocurrencies are an excellent option for holding surplus cash as it needs to be a long-term holding that can be sold quickly in times of crisis.

Suggestions for cash management

Holding surplus cash in cryptocurrency was one of many suggestions he shared for corporate cash management in response to the bankruptcies of multiple U.S. banks in recent weeks.

Draper advised companies to spread risk and hold short-term cash in two banks, one local and one global. He said the amount should be enough to sustain the business for at least six months.

In addition, he advised companies to factor yield and capital appreciation into their plans. Interest rates are high now, but so is inflation. Therefore, a company’s return on cash holdings can become “mission critical.” He said:

“Normally, corporate finance departments are primarily intended to hold cash, but this is not a normal time.”

He also recommended that the clients and suppliers companies work with are sound and do not cause unforeseen problems. I was.

Other suggestions included protocol tips on being wary of hacking and phishing and what to do if it occurs.

Draper also recommended that companies embrace decentralization and step off the corporate ladder by setting up redundancy to ensure decisions are made efficiently.