Tim Draper, a millionaire who has invested in bitcoin, put forward this suggestion to startup owners: keep at least two months of salary stored not just as cash but also as bitcoin or other types of cryptocurrency. This is important so that they won’t get hurt financially if something like Silicon Valley Bank (SVB) fails.
“Tim Draper’s Advice to Businesses
Tim Draper is an important person in the business world. He loves crypto and he has a great tip to help businesses stay afloat: diversifying cash. Mr. Draper shared this advice in a document on Twitter that said how companies can avoid running out of money during tough times. He also shared a list of seven things businesses can do to make sure they hold on to their funds. In 2014, Mr. Draper won an auction where he bought 30,000 bitcoins from the U.S Marshals Service — so it’s no surprise he’s always had good tips about bitcoin!
“Boards and management are in charge of making sure people get paid, even when it’s tough. That means it is important to make plans for what could happen if there’s a bank failure. There could be more of these failures because the government has been printing lots of money and changing interest rates. Silicon Valley Bank (SVB) collapsing recently showed how serious this can be if we don’t have a good plan.”
Many tech startups that were using Silicon Valley Bank had a difficult time when the bank suddenly stopped working. Thankfully, the Federal Deposit Insurance Corporation (FDIC) saved the day and made sure everybody’s money was safe by granting special permission from the Federal Reserve.
Protect Your Money from Bank Issues with Tim Draper’s Plan
Draper and some people from the Wharton School have come up with a plan for managing money. It says that businesses should not only keep their cash in one bank, but to put it in two different banks– one local bank and one international bank– so they won’t get all of their money at risk if something bad happens with either of them. They recommend to always keep 6 months worth of cash in both places just in case.
Draper recommends having a few extra saved up funds in bitcoin or other forms of cryptocurrencies, just in case there’s an emergency. He says this is important since governments are now taking control of banks and some governments could potentially become bankrupt. Bitcoin serves as a shield against these possible banking failures.
What do you think of the idea put forward by Tim Draper to use Bitcoin as a way to protect against bank issues? Let us know in the comments section!