{"id":19207,"date":"2023-03-28T07:56:31","date_gmt":"2023-03-28T07:56:31","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/bitcoin-millionaire-tim-draper-advises-startups-to-keep-bitcoin-as-a-hedge-against-a-domino-run-on-the-banks-finance-bitcoin-news\/"},"modified":"2023-03-28T07:56:31","modified_gmt":"2023-03-28T07:56:31","slug":"bitcoin-millionaire-tim-draper-advises-startups-to-keep-bitcoin-as-a-hedge-against-a-domino-run-on-the-banks-finance-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/bitcoin-millionaire-tim-draper-advises-startups-to-keep-bitcoin-as-a-hedge-against-a-domino-run-on-the-banks-finance-bitcoin-news\/","title":{"rendered":"Bitcoin Millionaire Tim Draper Advises Startups to Keep Bitcoin as a Hedge Against a ‘Domino’ Run on the Banks \u2013 Finance Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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Tim Draper, a venture capitalist and bitcoin millionaire, has included bitcoin as part of a series of cash management recommendations offered to startup founders. Draper recommended having at least two payrolls worth of cash in bitcoin or other cryptocurrencies to avoid being affected by bank failures like the collapse of Silicon Valley Bank (SVB).<\/strong><\/p>\n

Tim Draper Touts Bitcoin as Hedge Against Bank Failures<\/h2>\n

Tim Draper, a well-known venture capitalist and crypto enthusiast, has recommended bitcoin as part of his cash diversification advice for business founders. Draper, known for winning<\/a> an auction of 30,000 bitcoins from the U.S. Marshals back in 2014, and for his bitcoin price predictions<\/a>, posted a document on Twitter that comments on several considerations businesses should make in the face of bank failures.<\/p>\n

The document<\/a>, which presents seven different ways to avoid a cash crunch, states:<\/p>\n

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Since boards and management are responsible for making payroll, even in times of crisis, it is important to build out contingency plans for bank failures that could happen more and more often if government continues to print money and whipsaw interest rates to counteract inflation caused by the over-printing of money.<\/p>\n<\/blockquote>\n

Draper comments that the collapse of Silicon Valley Bank (SVB) showed the importance of having a sound contingency strategy in uncertain times.<\/p>\n

Per different reports, many tech startups that were dependent on Silicon Valley Bank faced a period of uncertainty when the bank collapsed, not having the necessary liquidity to complete payroll<\/a> payments. However, the U.S. Federal Deposit Insurance Corporation (FDIC) averted<\/a> the situation and made customers\u2019 deposits whole under a systemic risk exception approved by the Federal Reserve.<\/p>\n

Bank Diversification Recommendations<\/h2>\n

One of the key points in Draper\u2019s cash management plan, which was designed with the help of Wharton school individuals, is the diversification of banking risk. Draper states that businesses can no longer rely on just one institution to manage their cash, advising to keep at least six months of short-term cash in two banks \u2014 one local and one global bank.<\/p>\n

Also, Draper advises keeping at least two payrolls worth of cash in bitcoin or other cryptocurrencies, maintaining excess money in assets saleable for emergencies. He supports taking these measures by stating:<\/p>\n

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For the first time in many years, governments are taking over banks and governments themselves are at risk of becoming insolvent. Bitcoin is a hedge against a \u2018domino\u2019 run on the banks and on poor over-controlling governance.<\/p>\n<\/blockquote>\n

What do you think about Tim Draper\u2019s advice on keeping bitcoin as a hedge against bank failures? Tell us in the comment section below.<\/strong><\/em><\/p>\n

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\nSergio Goschenko <\/h6>\n

\nSergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved.<\/p>\n<\/div>\n<\/div>\n

Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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Disclaimer<\/strong>: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com<\/a> does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.<\/p>\n<\/div>\n

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