Tim Draper urged Draper Associate firms to invest in Bitcoin after the collapse of Silicon Valley Bank exposed how many firms aren’t managing their capital safely.
The fall of Silicon Valley Bank prompted Venture Capitalist Tim Draper to tell the firms he’d invested in to buy Bitcoin.
Silicon Valley Bank specialized in servicing venture capital-backed tech startups, including crypto firms. Stablecoin issuer Circle was among its many clients. SVB held $3.3 billion of Circle’s USD Coin (The crisis was averted, and USDC recovered only when it became clear that the United States government would bail out SVB.
In addition, Draper demands that the firms diversify beyond the banking sector and place a third of their capital in Bitcoin (Cointelegraph spoke with Danny Chong, co-founder of Tranchess, the yield-enhancing asset tracker, to gain further insight into the importance of treasury management. To highlight the importance of getting that mix right, Chong points out the collapse of SVB was itself, in part, due to poor treasury management:
To explain his thinking on BTC, Draper added, “If the domino effect happens and all the banks are in trouble, you’re going to have the money to pay your payroll, and it’ll be in Bitcoin.”While Draper Venture companies may now be hodling BTC as a last line of defense, there is still some way to go before Bitcoin ownership becomes a common risk aversion strategy.
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