Billionaire VC Tim Draper Asks Companies to Keep Pay in Bitcoin
Following the implosion of Silicon Valley Bank, the price of Bitcoin has soared, and businesses around the world are re-strategizing their finances as a result.
Billionaire venture capitalist Tim Draper has published a list of recommendations for businesses in the new macro climate, in which he advises companies to keep some cash in Bitcoin to cover salaries.
Tim Draper asks companies to keep salaries in Bitcoin
Things got extremely complicated for corporate clients of Silicon Valley Bank. Big tech companies with millions and billions of dollars in the bank are suddenly worried about their deposits.
That has led to a mad scramble to diversify or move to bigger, supposedly safer banks, and a huge surge in Bitcoin from $20,000 to $28,000 in two weeks. Companies feel insecure about their money in an unfamiliar way, which leads to uncertainty.
Billionaire investor Tim Draper has shared some strategies he advises that it may allow companies to better position themselves amid continued problems in the banking sector.
Among them include holding “at least 6 months in short-term cash” spread across a local and regional bank, and “at least two payrolls worth of cash in Bitcoin and other cryptocurrencies.”
Draper's target for BTC | BTCUSD on TradingView.com
Will companies move money to crypto?
The idea behind the crypto-related recommendation is that even in the event that a business cannot access its funds from a banking institution, it will at least be able to cover salaries for two pay cycles.
This is particularly important for technology companies in the Silicon Valley area, where in the state of California, corporate executives and other officers can be held personally liable for unpaid wages.
Salary costs can be significant and require access to liquid funds. For example, in 2022 Google had over 190,000 employees, with an average salary of $133,000 per year according to data. Assuming no variation in these numbers, two weeks wages would be $971 million, while two months would be $4.12 billion.
Many employees are paid biweekly, which would be at least $1.9 billion per pay cycle. And this is just one large technology company of size. If businesses actually listen to Draper, the amount of money that could flow into Bitcoin and crypto would be incredible.
And why wouldn’t they listen? Draper is a venture capitalist who has made winning bets on Coinbase, Twitch, Tesla, Twitter and Robinhood. Could this be why Draper expects Bitcoin to exceed $250,000 per coin?
