In a report Tim Draper, an American venture capitalist suggested that founders must contemplate a more diversified approach to cash management.
The excessive regulation of banks and micromanagement by the government necessitated that entrepreneurs take such an approach.
Bitcoin on the Verge of a New Bull market
As the value of Bitcoin approaches $28,000 again, traders of are being enticed to invest in alternative crypto tokens.
The recent US banking turmoil appears to have eroded the trust of some in the traditional banking structure. The Federal Reserve reported that during the second week of March, depositors withdrew almost $100 billion.
According to Rekt Capital, the price movement of Bitcoin is mirroring previous patterns, suggesting a traditional resurgence of a Bitcoin bull market.
Rekt Capital is a renowned analyst and trader who is known for his keen interest in cryptocurrencies.
As per the most recent analysis, Bitcoin is anticipated to commence a fresh long-term upward trend within a few days.
Tim Draper Advises Founders to Hold Crypto Reserves to Two Payrolls
Tim Draper cautioned entrepreneurs of an increase in bank failures if the government continued to manipulate interest rates and print more money.
Tim Draper is an American venture capital investor who is also the founder of Draper Associates and has investments in notable ventures.
He has strongly been advocating in favor of blockchain technology and the crypto industry.
In the wake of the Silicon Valley Bank (SVB) collapse, Draper advised entrepreneurs to hold a minimum of two payrolls in Bitcoin or other cryptocurrencies. He also recommended diversifying investments to mitigate uncertainty.
According to Tim Draper’s report, Bitcoin can serve as a safeguard against a potential chain reaction of bank failures and excessive government interference.
He emphasized that companies should not depend on a single financial institution or governing authority to handle their finances any longer.
Draper advised entrepreneurs to maintain a reserve of short-term cash for at least six months, divided between two different bank accounts.
According to him, the two banks’ accounts can be split between one foreign bank and the other local.
He pointed out that companies should additionally hold a minimum of two payrolls’ worth of funds in Bitcoin and other crypto tokens.
Governments Seize Control of Banks – Preventive Steps
Draper stated that these precautionary measures were crucial in his opinion. He reasoned that for the first time in a long time, banks were falling under government control.
He added that at this point the governments themselves were in danger of going bankrupt.
He also disclosed that following the shutdown of Silicon and other banks, he had received requests for emergency aid from numerous start-ups.
Moreover, Draper stressed the significance of having backup strategies in place because there are payment deadlines even during a crisis.
According to him, it’s crucial to create backup plans for the increased bank failures amidst the government’s weak monetary policies.
This is if the government persists in printing more money and fluctuating interest rates to combat inflation caused by excessive money printing.
Potential Fraud
Draper cautioned entrepreneurs to remain watchful of the potential for fraud. He highlighted that scammers were adept at detecting vulnerabilities in a system and taking advantage of them.
Additionally, he gave his recommendations on how one can avoid phishing attacks.
He guided businessmen to confirm with all concerned parties when there’s a modification in wire instructions or the implementation of a new approval process
Cryptocurrencies Gain Traction as Investors Hold on to Bitcoin
The shift from traditional banking institutions to digital currencies might already be underway. This is demonstrated by Bitcoin’s impressive performance over the past few days.
Despite the recent price surge, investors appear to be in no rush to sell their Bitcoin holdings. In the near future, traders should exercise discretion when choosing which cryptocurrencies to trade.
However, most crypto enthusiasts opine that the crypto market will only flourish amidst banking system failures. Crypto investors are positive about their investments especially if it is in Bitcoin.