Billionaire Tim Draper says Bitcoin (BTC) is a hedge against potential domino banking crisis
Billionaire investor Tim Draper says Bitcoin (BTC) could be a tool for businesses to hedge against any potential banking crisis.
In a new note aimed at startup founders, Draper says the recent collapse of Silicon Valley Bank (SVB), plus the “over-regulation” of banks by the government means that business founders should consider a more diversified cash management strategy.
“Since boards and management are responsible for making salary payments, even in times of crisis, it is important to develop contingency plans for bank failures that can happen more and more often if the government continues to print money and whip up interest rates to counter inflation caused by overprinting money.”
The venture capitalist says companies should consider keeping at least two payrolls worth of Bitcoin or other crypto assets in their reserves as part of a diversification strategy.
“Companies can no longer rely on one bank or governing body to manage their cash. We recommend having at least six months of short-term cash in each of two banks, a local bank and a global bank, and at least two payrolls worth of cash in Bitcoin or other cryptocurrencies.
Excess cash may be longer-term, but easily salable in an emergency. For the first time in many years, governments are taking over banks, and the states themselves are in danger of becoming insolvent.
Bitcoin is a hedge against a ‘domino run’ on the banks and against bad over-controlling governance.”
Earlier this month, Draper said he was almost 100% certain that Bitcoin would explode to $250,000 per BTC in the next 18 months.
At the time of writing, BTC is trading at $27,505.
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