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If proper investment is made and your BTC portfolio has grown to a point where you can sustain a particular lifestyle, using the method you explained on withdrawing using the 200-wma will really be a good idea, but at the same time, diversifying your investment alongside BTC will be most ideal if this method should be implemented. Cause certainly, there would be a time in which the price will be even lower than 35% of the 200-wma as you stated earlier, at that point, you won't be able to make any withdrawals (strictly following the strategy you provided), then for that month, no bills will be paid, it can sometimes remain below 30% of the 200-wma for months, then living a sustainable lifestyle might be difficult.
Fair enough that some form of diversification may well be justified to prepare for possible time periods in which BTC spot prices start to go below 25% above the 200-WMA, and it may well end up in periods of going as far as 35% below the 200-WMA, and so sure, none of us should want to be selling BTC at a time that is not of our complete choosing and we may well choose to either sell from other assets first or perhaps have emergency funds (in cash, or something more similar to cash) for those kinds of periods that we might not be wanting to use much if any of our BTC.
Diversification can be a confusing term in the bitcoin and/or crypto space because some folks may well consider that they might need to be diversified into shitcoins, which could even make matters worse for anyone to be exposing themselves to shitcoins and considering that they are diversifying outside of bitcoin.. even though surely there could be various kinds of funds that could be available for use in emergencies that could be considered diversification beyond bitcoin.. so perhaps if a person may have 10 years or more of his expenses/income in bitcoin at a 200-WMA valuation, then during the periods that bitcoin had been appreciating in value there could have had been some motivations to sell some of those BTC to keep in cash (whether it might be 10% or more) or perhaps to put that value into other kinds of somewhat liquid locations that are similar to cash.
Many of us may well recall that from June 2022 until about October 2023, BTC prices spent a lot of time at or below the 200-WMA, and we did reach peak lows of BTC prices 35% below the 200-WMA, and even though that period of 35% below the 200-WMA did not last for very long, there still could have been concerns of BTC holders about cashing out any of their BTC during periods of those kinds of BTC price levels.
With this, I suggest that, having BTC as a means of achieving FIRE (which is the best) it should be complimented with gold investment or any other sustainable investment so as to offset the setbacks of BTC,
I am not personally too excited about gold or the need for gold,
seeing that having all your eggs in one basket is a dangerous feat.
You can keep cash, equities, properties, and other forms of protecting yourself besides gold, yet sure, I am not 100% against gold, but there could be issues of getting out of gold, and if you have systems in place for getting in and out of gold, then sure, it could serve some balancing kind of purpose to help a guy from not having to cash out very much of his BTC at a time that is not of his choosing.
You also provided the option of working and that is a really solid idea too or you can start up a business that you have always wanted to although, not everyone have the ability to do so. The option of investing in real estate is also there, maybe good stocks too but along side BTC so as to have a more realistic FIRE when the time comes.
Sure.. there could be side sources of income, especially that might involve kinds of work that a guy is choosing to perform, yet surely if there is reliance on the work because BTC prices are crashing, that could also mean that a person had entered into a FIRE status at a time in which he was not prepared...
And yeah, surely property can be a way in which someone is diversified in his investments and he could get income from properties too.. and hopefully not forced to work to manage the properties, even though some level of work may be part of a lot of various kinds of obligations that guys might realize that they have in regards to the kinds of investments that they choose, and so yeah in the context of owning a business and being a behind the scenes player in the business, sometimes a person with those kinds of businesses might end up being forced to work in circumstances in which the business ends up blowing up in ways that had not been anticipated..
In 2015, I had a business partner who was supposed to be doing a lot of work for "our business" and so I ended up having to spend quite a bit of time picking up pieces between 2015 and 2019.. and sure it was not a full-time job, but it ended up being more work than I had wanted to do. ..
But what if we have a scenario where you are a long time investor in BTC and your portfolio have grown to the extent it has beat so many ATH's of BTC, at that point, will withdrawing despite having your price go lower than 30% of the 200-wma be sustainable, I know it's important to have a strategy so as not to deplete your portfolio, but is there a situation where the less than 30% condition can be overlooked, maybe taking 1-2% profit during those period, cause at the end of the day, BTC price will see another ATH bringing your investment high again dollar-wise.
A person can have cushions in his BTC holdings, and perhaps the point that a person first gets into FIRE status, there may be more uncertainties, and so if he is conservatively withdrawing from his BTC, then his BTC is still growing, and so if he goes through another BTC cycle, he may even be in a better place.
So the guy with 100 BTC in the beginning of 2021, might have felt that he was struggling to be careful during the 2022 and 2023 periods of BTC price difficulties, so maybe between early 2021 and now,
he ended up spending 33% of his BTC stash, so he currently ONLY has 67 BTC, yet he still is doing much better now with 67 BTC as compared to how he was doing during the 2022 difficulty period, so part of his concern would be to make sure that he has enough and more than enough BTC when he enters into a FIRE status/practice.
In some other threads, I had mentioned that the guy who is currently aiming at 21 BTC is going to feel in a much better position if he happens to have 35 BTC right now and with a lot of options, as compared with the guy who has 7 BTC and is still working towards getting to a status of having enough or more than enough BTC... so sure, anywhere between 21 BTC to 35BTC may well feel fine, yet the guy might not feel good about going into FIRE status until he is 60% above the goal, and it surely would be premature for him to be going into such FIRE status/practices if he was still 60% below the goal, yet in 4-6 years that guy with 7 BTC might either be at or near the goal, he might even choose to wait a few more years to make sure that the 7 BTC that he has is more than enough for him to feel comfortable that he is 30% to 60% higher than what he considers his goal, which also it seems to me that bitcoin allows for those kinds of expectations and preparations - even if the matter of getting there is not guaranteed to happen exactly within any kind of a specific timeline, but the guy can still have good ideas how to deal with his situation once he has already spent a few cycles building up his BTC stack size.