In regards to your suggestion that the extra BTC could serve as an emergency fund is not completely off point, since whenever anything is extra there are options with it - yet still it does not tend to be good practices to have your emergency fund denominated in something other than your own local currency... which truly having BTC as part of your emergency fund could lead to selling some of them at price points that are not very convenient.
that is true, it is good to have our emergency fund in fiat instead of having it bitcoin. you know sometimes people might be having issues of emergency and we just need the emergency fund to sort some things out but some factors may deprive us from get it immediately as expected or not having it exactly as expected, such like:
1. Delay of transactions in mempool, someone may be trying to sell his coin in return of emergency fund during the period mempool is congested and transaction may delay just like the having period, when people find it difficult to trade there coin. some transaction where pending for a week or more with a higher TRX fee.
2. during the time of selling of BTC for emergency it could be that maybe your 1 btc at the rate of $70k may have fallen to $60 losing a huge amount of $10k.
3. Dollar/fiat may have dropped. for example you may have the opportunity to have sell your bitcoin when the price of bitcoin was high and your local fiat was also high, given you a more advantage of higher return but you didn't sell it that period. but you sold it during emergency when btc has dip and you currency to dollar has reduced, you will sell at lost which may be problematic. though it may be vise versa as the case may be but there is a need to have have emergency fund in Fiat than I bitcoin, for the sake of unforseen circumstances and immediate spending.
For the most part the rule of thumb is to be keeping some value, such as emergency fund, float and/or reserves in dollars (or your local currency), and there are empowering reasons to be doing that, even if it might seem as if having so much money in dollars (or other fiat) is not really working capital.
At some point, a person might be so far above and beyond his own fuck you status that it no longer matters in terms of some of the employment in good cashflow managing practices, so in some of those regards, there could be some tendencies to just spend however you like and whenever you like without worrying about from where you are drawing your funds... .. yet there still could be limits, so lets say that the guy who had established that he needs 5 BTC to live and to be at fuck you status, but if he has 20 or even 50 BTC, then he has even more room to be flexible in his spending of bitcoin, even though it probably would still be better for him to engage in solid cashflow management practices, so sometimes the amount of need for discipline could end up going down if the wealth grows yet the spending is still way within sustainable limits even if the spending might be coming from places like bitcoin rather than from cash. .. such as the ideas to spend your cash and your worst money first.... but if the value is so excessive and the budget is still well within sustainable limits an emergency fund might not even be needed to be kept when a person has already overly reached various wealth building goals.. whether having the wealth in bitcoin or in other places.. or even the person who might choose to keep all of his value in bitcoin, but if he is 5x to 10x higher than his fuck you status level, then there might be a so much extra room for error that it does not matter too much... if he might end up drawing from BTC funds even when BTC is at its lowest price points in a cycle... so for example in late 2022 when bitcoin prices were $15,500 to $17k, maybe a person with less than $500 costs per BTC does not really care, especially if he might have way more BTC than he needs, maybe even more than 100 BTC.. so a lot of cushion in his wealth...
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So the best time for one to have such mindset that of buying back is when they have already gotten themselves some good amount of Bitcoin stashed (having enough Bitcoin in their portfolio), like for instance a guy accumulation goal was for him to have 5 BTC , so after accumulating for some time he endup hitting that goal , so now he decide to continue with his holding though has done with the accumulating part . Then lateron he decided to start taken some profit from his holding, so while doing so he saw that his Bitcoin Stash us kinda reducing due to the withdrawing, so he may decide to buy some quantities using lump-summing or other convenience method, to purchase some quantities in order to coverup for those withdrawal he has made back then . It is not relevant that it must be same amount he withdrew, he might purchase quantities that's not up to the withdrawal or quantities that's more than that they have withdrew from Their holding .
It seems to me that in your example of having a goal of getting to 5 BTC, there might be some recognition of the ability to sell and/or to play around with the extra BTC if that same person had actually gotten to 6 BTC, so then the extra 1 BTC ends up being a overaccumulation cushion... that allows for more freedom.. so then maybe the 5 BTC becomes somewhat untouchable, yet the extra BT are able to have more flexibility in terms of whether some of them might be sold at various points.
Sure, 5 BTC might be enough too for a person who might be considering about 4 BTC is enough .. so 5 is more than enough..
And, so reassessments can be made at various points in regards to how much is enough and how to calculate how much of the stash might have more flexibility in terms of potentially setting various sell price points or even selling certain quantities on regular bases on on timeline and with formulas that you might calculate yourself. My sustainable withdrawal thread goes over timeline and also price-based sustainable withdrawal considerations.
Having more than enough Bitcoin is the dream of all investors, just like you said that an investor planned to accumulate 5btc but was able to accumulate 6btc, it means that he can do whatever he like with the extra 1btc and it will be fine if he sells in some of it whenever he wants. He can still use his 1btc to serve as his emergency funds so that he only sells when a real emergency comes, so that he will not be carried away of selling too much.
Getting to a point of over-accumulation does tend to result in a lot of options that were not otherwise available during the time that accumulation was still taking place, and a person likely gets from 5 BTC to 6 BTC after a decent amount of hard struggles.. and sure there sometimes could come reassessments that end up allowing conclusions that 5 BTC is enough - and then recognizing that he has 6 BTC..
In regards to your suggestion that the extra BTC could serve as an emergency fund is not completely off point, since whenever anything is extra there are options with it - yet still it does not tend to be good practices to have your emergency fund denominated in something other than your own local currency... which truly having BTC as part of your emergency fund could lead to selling some of them at price points that are not very convenient.
But yeah even having 6 BTC rather than 5 BTC could cause the HODLer to feel comfortable to begin some kind of a
sustainable withdrawal strategy - especially since he has extra BTC. Even with a 6% withdrawal rate, there could be 0.025 to 0.03 BTC withdrawn every month... and it would take quite a while (several years) to deplete the amount down to 5 BTC.
You speak with so much wisdom here because selling your BTC for emergency funds just because you've accumulated more than your target sounds awkward to me accept you are selling to purchase a valuable real life assets or projects but as for anything relating to emergency funds, Bitcoin is too volatile and valuable to be sold for some common emergency funds.
Yeah but Frankolala was not talking about selling BTC for emergency funds, but instead using the extra BTC funds as part of his emergency funds.
You know when we are talking of emergency funds some investors doesn't really understand the basis that it should be done with your local currency instead of selling Bitcoin. Bitcoin should not be sold to solve some immediate real life challenges but if it be on assets that can bring good proceeds then the need may arise considering the fact that you've got surplus in your portfolio.
Generally, I think that it is still preferable to engage in better cash management practices, even if you have excess value, but you get more and more freedoms the higher your value gets, so you may well not be needing to be as strict as you had been in the earlier days, but the mere fact that you can get away with not being as strict does not necessarily justify engaging in sloppy practices.. even though sometimes some extra risks might be taken (and even afforded to be taken) based on various aspects of having excess wealth, whether held in bitcoin or otherwise.