Tim Draper advises “at least” two payrolls in bitcoin

Tim Draper, an American entrepreneur and venture capitalist, encouraged founders to hold at least two payrolls’ worth of cash in Bitcoin or similar cryptocurrencies, in addition to other diversification suggestions, in reaction to the uncertainty caused by the failure of Silicon Valley Bank (SVB).

Tim Draper argued in a March 25 study aimed at company owners that Bitcoin is a hedge against a “domino run” on the banks and intrusive government action and that firms “can no longer depend” on a single bank or regulatory body to handle their funds.

Draper advised firm owners to maintain at least “six months of short-term capital” in two distinct bank accounts—one with a local bank and the other with an international bank.

Also, he highlighted that enterprises should hold at least two payrolls’ worth of Bitcoin and other cryptocurrencies.

According to Draper, these preventive measures were essential because, for the “first time in many years,” governments are assuming control of banks, and governments themselves are “in danger of insolvency.”

Furthermore, he said that “several companies” sought him out for emergency assistance when SVB and other banks failed.

Draper also underlined the need for contingency preparations, since boards and management are accountable for achieving payroll obligations “even in times of crisis.” He said:

“It is important to build out contingency plans for bank failures that could happen more and more often if the government continues to print money and whipsaw interest rates to counteract inflation caused by the over-printing of money.”

Draper emphasized the possibility of fraud and urged entrepreneurs to be alert against it, saying that fraudsters are adept at detecting and exploiting system vulnerabilities.

Furthermore, he encouraged founders to confirm with all parties if there is a change in wire instructions or a new approval procedure to avoid phishing theft.

This follows recent reports that Draper sang a Bitcoin song he produced himself during his keynote address at Paris Blockchain Week 2023 on March 22.

He added that the song was dedicated to SVB and “all failing and future banks.”

The crowd applauded the song, and Draper concluded his time on stage by stating that blockchain, Bitcoin, and smart contracts constitute one of the “biggest shifts in human history.”