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billionaire VC Tim Draper urges companies to continue paying employees with bitcoin

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Bitcoin’s price has been rising since Silicon Valley Bank’s collapse, and as a result, companies all around the world are rethinking their financial strategies.

Tim Draper, a multimillionaire venture capitalist, has produced a list of suggestions for enterprises operating in the new macro environment. One of his suggestions is to keep some cash on hand in Bitcoin to pay employees.


Tim Draper urges companies to continue paying employees with bitcoin

For Silicon Valley Bank’s corporate clients, things became incredibly difficult very quickly. The deposits of large internet businesses, which have millions and even billions of dollars in the bank, are now causing concern.

A frenzied rush to diversify portfolios or transfer accounts to larger, supposedly safer institutions has resulted, and Bitcoin has soared from $20,000 to $28,000 in only two weeks. Businesses are experiencing a new kind of financial insecurity that is creating uncertainty.

Tim Draper, a multibillionaire investor, has given several tactics that he believes might help firms better position themselves in the face of ongoing problems in the banking industry.

You should also have at least two payrolls worth of cash in Bitcoin and other cryptocurrencies, as well as at least six months in short-term cash spread across local and regional banks.



Will businesses transfer cash into crypto?

The rationale behind the crypto-related advice is to ensure that a company will at least be able to pay its employees for two payroll cycles even if it is unable to access its funds via a financial institution.

This is crucial for tech companies in the Silicon Valley region since CEOs and other corporate leaders in the state of California may be held personally accountable for unpaid salaries.

Payroll expenses might be high, thus it’s important to have access to liquid assets. For instance, records show that Google had over 190,000 workers in 2022, with an annual average compensation of $133,000 per employee. Two weeks of payroll would cost $971 million, while two months would cost $4.12 billion, assuming that these figures stay the same.

Given that many workers receive biweekly compensation, the payment cycle would cost at least $1.9 billion. And this is only one sizable large tech business. The amount of money that might flow into Bitcoin and other cryptocurrencies would be amazing if companies genuinely listened to Draper.

So why wouldn’t they pay attention? Venture entrepreneur Draper has made profitable investments in companies including Coinbase, Twitch, Tesla, Twitter, and Robinhood. Could this be the reason Draper thinks Bitcoin will cost more than $250,000 a coin?