Draper’s Diversification Advice: Bitcoin and Cryptocurrency as A Solution to Bank Failures

American venture capital investor and Bitcoin entrepreneur Tim Draper, recently issued a warning to business founders. He believes that if the government continues to “print money and whipsaw interest rates,” we could see “more and more” bank failures. 

As a result, Draper is urging entrepreneurs to take action to protect their businesses, including diversifying their cash holdings by investing in Bitcoin and other cryptocurrencies.

In a report directed at business founders, Draper highlights the need to be prepared for the potential collapse of traditional banking institutions. He suggests that businesses should no longer rely on a single bank or governing body to manage their cash. 

Instead, he advises keeping at least “6 months of short-term cash” in two separate bank accounts, one local and one international. He also recommends keeping at least two payrolls worth of cash in Bitcoin and other cryptocurrencies.

Draper believes Bitcoin is a hedge against a “domino run” on the banks and overbearing government intervention. In his opinion, this is because for the “first time in many years,” governments are seizing control of banks, and governments themselves are “at risk of becoming insolvent.”

These preventative measures are necessary because of the collapse of Silicon Valley Bank (SVB) and other banks. Those incidents have left many startups seeking emergency relief. 

Draper emphasizes the importance of contingency plans for bank failures that could happen more and more often if the government continues to print money. There’s also the threat of whip-sawing interest rates to counteract inflation caused by the over-printing of money.

In addition to diversifying cash holdings, Draper advises founders to be vigilant against the risk of fraud. Fraudsters are skilled at identifying weaknesses in a system and exploiting them. 

To prevent phishing theft, he advises verifying with all parties involved whenever there is a change in wire instructions or a new approval system.

By diversifying their cash holdings with Bitcoin and other cryptocurrencies and following Draper’s advice on contingency plans and fraud prevention, businesses can protect themselves against potential disasters. 

As the saying goes, “An ounce of prevention is worth a pound of cure.”

None of the information on this website is investment or financial advice and does not necessarily reflect the views of CryptoMode or the author. CryptoMode is not responsible for any financial losses sustained by acting on information provided on this website by its authors or clients. Always conduct your research before making financial commitments, especially with third-party reviews, presales, and other opportunities.

JP Buntinx

JP Buntinx has been writing about cryptocurrency since 2012. His interest in crypto, blockchain, fintech, and finance allows him to cover a broad range of different topics.

Published by
JP Buntinx

Recent Posts

Nigerian Crypto Gift Card Services Patricia Temporarily Suspends Withdrawals

In response to a significant security breach, Patricia, a renowned Nigerian gift card and cryptocurrency…

27 mins ago

EOS (EOS) and Cosmos (ATOM) leave holders disappointed; Here’s why Collateral Network (COLT) is set to surpass both

EOS (EOS) and Cosmos (ATOM) have performed poorly in recent times, leaving investors disappointed. On…

57 mins ago

Big Eyes Coin Rolls Out Stage 3 Prices With Massive Rewards In Its Casino

In a post-pandemic world, online gambling has found a lot of popularity. Once, casinos were…

2 hours ago

Why the Next Crypto Millionaires Are Investing in This Undervalued Token, Leaving Sandbox (SAND) Behind

The crypto landscape is constantly evolving, and trends in investor sentiment can shift swiftly. In…

2 hours ago

Will Sparklo (SPRK) Presale Upstage Chainlink (LINK) and KuCoin Token (KCS)?

As speculations about bullish and bearish runs gather momentum, investors are making significant profits by…

2 hours ago

The Security Breach at Jimbos Protocol: The Power Of Slippage Control Issues

The rapid evolution of decentralized finance (DeFi) in the crypto sphere undeniably reshapes our financial…

3 hours ago