ledgernoise.com
Daily Crypto News

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


Billionaire venture capitalist Tim Draper believes businesses should hold “at least two payrolls worth of cash” in Bitcoin (BTC) and other cryptocurrencies.

Draper did not specify the percentage allocated to Bitcoin versus altcoins. However, he called BTC a hedge against deteriorating economic conditions.

Bitcoin is a hedge

Draper said that the collapse of banks like Silicon Valley and Silvergate shows the need for contingency plans to ensure that a business always has cash at hand to be able to sustain itself and its employees. He added that governments have been over-regulating and micromanaging the banking sector, harming its long-term health.

He said businesses need to diversify and decentralize to remain sustainable in the current economic conditions. Such bank collapses will become more likely if governments continue over-printing money and whipsawing the interest rate to contend with the resulting inflation.

Draper said that state takeovers and lenders’ bailouts are making governments susceptible to insolvency, and Bitcoin offers a potential solution. He said:

“Bitcoin is a hedge against a ‘domino’ run on the banks and on poor over-controlling governance.”

He added that cryptocurrencies are an excellent option to hold excess cash as they need to be a long-term holding readily saleable in times of crisis.

Suggestions for cash management

Holding excess cash in crypto was one of many suggestions he shared on cash management for businesses contending with the collapse of multiple U.S. banks in recent weeks.

Draper advised businesses to diversify their risk and hold their 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.

Additionally, he advised businesses to incorporate yield and capital appreciation into their plans as interest rates are high now, but so is inflation — so returns on a company’s cash holdings can be “mission critical.” He said:

“Normally a company’s treasury department is mostly meant to preserve cash, but these are not normal times.”

He also recommended that businesses ensure the clients and suppliers it works with are healthy and will not cause unforeseen issues. Draper advised having “frank and honest” discussions with relevant parties.

Other suggestions included being wary of hacking and phishing and protocol tips on what to do in case it happens.

Draper also recommended businesses embrace decentralization and move away from the corporate ladder by setting up redundancies to ensure decisions are made efficiently.

Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.





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

Disclaimer:The information provided on this website does not constitute investment advice, financial advice, trading advice, or any other sort of advice and you should not treat any of the website’s content as such. NewsOfBitcoin.com does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.