Tim Draper is a well-known name in the world of business. He has recently shared some much-needed advice on the matter of the current financial situation.
At present, many financial gurus and investment pundits have come forward to share their two cents on the matter of financial preservation. For context, three of the banking enterprise in the USA has filed for bankruptcy.
This sudden demise in the banking sector is very reminiscent of the 2008 financial crisis. Therefore, many investors and firms are looking to experts and market analysts for advice and suggestions.
One well-known investor Tim Draper has risen to the occasion on this matter as he advises businesses to purchase more Bitcoins. It is no surprise since Bitcoin is often touted as the store of value that can secure investors from the shortcomings of traditional banking systems.
Bitcoin as a Hedge Instrument
Draper is a successful venture capitalist and he has told the media that Bitcoin is a hedge against inflation. He claimed that many financial institutions are suffering from the impact of SVB and Silvergate banks.
He mentioned that the example of these banking enterprises indicates that custodial enterprises must always have some cash on their hands to sustain their operations and release the salaries of their employees. He pointed out that the government is currently busy over-regulating the sector.
Draper told his listeners that the micro-managing stance of the US regulators towards the financial markets can lead to a harmful impacts on the greater financial networks. Therefore, he has emphasized on the need for opting for decentralization on a commercial scale.
He also projected that government agencies are likely to continue printing more money and increasing the interest rates on account of inflation spikes.
As per his acute observation, the US government cannot keep affording to offer bailouts and expensive takeovers. He claimed that this is not a sustainable solution that can lead to destabilizing the government.
Therefore, he put a greater emphasis on the value of Bitcoin as a hedge against inflation. He also advocated the role of cryptocurrencies as the best way to maintain liquidity and cash and avoid any insolvency crunch.
He also advised the commercial enterprises to store their reserves in at least two separate banking enterprises.
He mentioned that by dividing the total reserve of a firm between a local and an international banking enterprise, the firm will be able to assure its survival for at least 6 months. He has advised businesses to use decentralization to offset the current financial risks.
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