Billionaire VC Tim Draper Tells Businesses To Keep Payroll In Bitcoin
After the Silicon Valley Bank implosion, the price of Bitcoin has soared and companies around the world are reshaping their finances as a result.
Billionaire venture capitalist Tim Draper has published a list of recommendations for companies in the new macro climate, in which he recommends that companies keep a portion of their cash in Bitcoin to cover payroll.
Tim Draper tells companies to keep payroll in Bitcoin
Things got extremely complicated for Silicon Valley Bank’s business customers. Big tech companies with millions and billions of dollars in the bank are suddenly worried about their deposits.
This caused a mad rush to diversify or move to bigger and safer banks, and a huge rise in Bitcoin from $20,000 to $28,000 in two weeks. Businesses are feeling insecure about their money in an unknown way, leading to uncertainty.
Billionaire investor Tim Draper has shared some strategies he recommends it could allow companies to better position themselves amid ongoing problems in the banking sector.
These include holding “at least 6 months of short-term cash” split between a local and regional bank and “at least two cash payrolls in Bitcoin and other cryptocurrencies.”
Draper's target for BTC | BTCUSD on TradingView.com
Will companies transfer money to crypto?
The idea behind the crypto-related recommendation is that even in the event that a company is unable to access its money from a banking institution, it will at least be able to cover payroll for two payroll cycles.
This is especially important for technology companies in the Silicon Valley area, where, in the State of California, CEOs of companies and other employees can be personally liable for unpaid wages.
Payroll costs can be considerable and require access to liquid funds. For example, Google in 2022 had more than 190,000 employees, with an average salary of $133,000 per year, according to data. Assuming there is no variation in these numbers, two weeks of payroll would be $971 million, while two months would be $4.12 billion.
Many employees are paid biweekly, which would be at least $1.9 billion per payroll cycle. And this is just a big sized tech company. If companies really listened to Draper, the amount of money that could flow into Bitcoin and crypto would be incredible.
And why wouldn’t they listen? Draper is a venture capitalist who has placed winning bets on Coinbase, Twitch, Tesla, Twitter and Robinhood. Could this be why Draper expects Bitcoin to surpass $250,000 per coin?