Truly in every investment general there is always a need for other means of savings which could be known as emergency funds or reserve funds, although they are both two different things but sometimes can be substitute for each other, so actually in terms of Bitcoin investment emergency funds plays a very vital role because is actually one of the determining factor of your investment success because if there is an emergency funds there is no way any unforseen need will stand as a barrier on your investment because you already have other funds that will take care of those needs. Actually this has been one of the challenges most investors are facing because they always get overwhelmed by there investment and forgetting the things that should be put in place in other for there investment to stay strong such as the emergency funds.
Emergency fund is very important when it comes to saving. Emergency funds help you stretch your savings seamlessly. It is very important to create a fund to save for investing in Bitcoin, so that you can use it in times of danger or emergency and your savings do not suffer any loss. You can divide your income into 4 parts.You can use one part for your family, second part for yourself, third part for your emergency fund and fourth part for investments. This method may help you maximize your savings.
Emergency fund is not recommended for investing in bitcoin but no bad to use it because put emergency fund in bitcoin have potential in the future price keep increasing than hold in pocket only, not really difficult for withdrawing emergency fund when saving in Bitcoin due put or hold in exchange wallet and when emergency happening to us we can sell and withdraw to bank account without take 10 minutes. No one can't predicting when happening with something urgent for us and my opinion better put emergency fund in bitcoin investment and seems the same when have parent hold or save their money allocated for children education. Hold in the bank can make it double although we start investing when our children under two or three years and take at seven or ten years later. Its very important allocated our fund for children cost but effective when saving or put in Bitcoin.
It is wrong to put your emergency funds in bitcoin and it is a bad idea. Emergency funds should be in cash and not in bitcoin. The reason is because if you put your emergency funds in bitcoin, and an emergency occurs when bitcoin price is in the dip, you will run at loss when withdrawing your funds from bitcoin totake care of that emergency. What if the emergency is the actual amount of funds that you have saved for up as your emergency funds. It means that when such emergency occur, and your funds is in bitcoin, you will sell at loss and also sell part of your bitcoin to balance up the loss due to dip in price at the moment when that emergency occurred. This is why it is not wise to keep your emergency funds in bitcoin but fiat. For easy access and it is stable.
Bitcoin investment is just about understanding the right approach to making sure that you do not tamper with your holdings in the short run so making provisions for emergency funds is a criteria that will ensure you won't touch your holdings because it will give you the liberty to attend to other arising expenses in the future instead of selling your Bitcoin when emergency arises and it will be unconscionable for anyone to sell BTC to Fiat just because you want to attend to an immediate problem.
People that can keep their emergency funds in bitcoin are those investors that have accumulated more than enough Bitcoin or feel that they have enough Bitcoin, because they have reached their bitcoin target and if they sell, they will not run at loss either during the dip or when bitcoin price is high. Part of their bitcoin can serve as an emergency funds for them.
Emergency funds, reserve funds and float should be in fiat.
Sure some people who have gotten a huge stash of bitcoin can still keep their emergency funds in Bitcoin but to me it will be unwise for any bitcoin investor to convert their Bitcoin to Fiat simply because they want to attend to an emergency because if it is a time when transactions fee are high and there is so much congestions in the mempool it will be difficult to attend to that emergency needs are that particular period of time since the transaction may be delayed and to withdraw little amount of Bitcoin with a high transaction fee is not ideal. However your ending paragraph is just the best way