Billionaire VC Tim Draper has urged businesses to hold at least two payrolls’ worth of Bitcoin or other cryptocurrency.
The American, an early investor in several high-profile tech companies including Hotmail, Skype and Twitch, is known to be an advocate of Bitcoin.
The recent failure of Silicon Valley Bank in the United States saw it taken over by US regulator the Federal Deposit Insurance Corporation before First Citizen Bank acquired it yesterday. SVB UK, despite operating as a separate business, was acquired by HSBC for just £1 two weeks ago.
“With the uncertainty created with the failure of the Silicon Valley Bank, and the continued micromanagement by government and over-regulation of banks, founders need to consider a more diversified cash management approach,” advises Draper.
“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.”
His contingency plan includes “keeping at least six months of short-term cash in each of two banks, one local bank and one global bank, and at least two payrolls worth of cash in Bitcoin or other cryptocurrencies”.
He explains: “Excess cash can be longer term, but easily saleable in emergencies. 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 ‘domino’ run on the banks and on poor over-controlling governance.”
He also advised companies to consider yield and capital appreciation amid high interest rates and inflation, and to ‘decentralise’ decision-making within businesses that have many staff working from home.
Cryptocurrency shorts
The CTO of Nvidia says cryptocurrencies do not “bring anything useful for society” despite selling huge number of its computer chips to the sector for mining. Michael Kagan said other uses of processing power, such as artificial intelligence chatbot ChatGPT, are more worthwhile.
Michael Stollery, the California-based CEO of Titanium Blockchain, has been sentenced to four years of prison for his role in a fraudulent initial coin offering in 2018 that conned investors out of $21 million.
Crypto tax calculation service Recap has launched an NFT Gallery to provide investors with a single showcasing platform powered with AI-driven appraisals and tax-tracking functionality.
Crypto prices
The overall market cap of the 23,000 coins is at $1.18 trillion at the time of writing (7am UK), a 2.2% increase in the last 24 hours.
For round-ups of recent cryptocurrency news developments, click here.
For valuations of the top 100 coins by market cap in US dollars, plus 24-hour price change, see below.