I would suggest that most risks related to bitcoin, including risks of bitcoin going to zero fall into two categories.

1) execution risks - related to how you hold your BTC and secure them - which would also include third-parties that you might trust.

2) risks related to the asset itself  - surely bitcoin is  constructed upon open source software and then run by folks all around the world. There could be current bugs in the software or future implementations, which also  might relate to various kinds of insider social attacks.

We likely have more control over risks in the first category, and I am not even proclaiming that risks in the second category are meaningfully measurable, but those second category risk surely are not zero.

Some of the flaws (or risks) could bring a bitcoin investment to being unprofitable rather than going to zero.. so there are variations of scenarios to the downside and various scenarios to the upside, so the kinds of scenarios are likely on  a sliding scale, especially when referring to the  future, even though once the scenario plays out (at various points in time) it becomes absolute. 

For example, if am investing into bitcoin, and in February 2020 I try to assess bitcoin, and at that time the BTC price is largely bouncing around in the $9,500 price territories, and I lay out a variety of projected scenarios regarding where I believe bitcoin's prices might be in February 2025, I likely would account for a variety of possible upside scenarios, downside scenarios and even sideways scenarios.  I might outline 10 or more scenarios,  yet by the time February 2025 comes, ONLY one of the scenarios ended up playing out, and it might have even had been considered a minority scenario,  but by the time, the scenario plays out, that played out scenario becomes  my new base upon which to measure future scenarios from  a more informed position, so in February 2025 I am in a better position to speculate about what might happen in February 2030  as compared to where I was in February 2020.

At the same time, any of us should also be able to recognize/appreciate bitcoin's asymmetric bet to the upside (so we should be attempting to prepare ourselves accordingly, since not all future scenarios are equally plausible), since even if we may well recognize various negative scenarios, we can also recognize that the upside scenarios are quite great that still justify putting value in bitcoin rather than putting such value into other kinds of assets and/or currencies, including that bitcoin may well be the best place to put value on a wide-scale basis (even when accounting for various downside risks) as compared to other options regarding where to put value. Many people will refer to bitcoin as amongst the best (if not the best) risk-adjusted place to put value, which largely means that even accounting for the risks and the uncertainties (which are not zero), bitcoin is still the best place to put value, and at the same time, it is not guaranteed to go up.. Both things can be true at the same time.


Every one of us should want to still be alive in our bitcoin investment 10-15 years down the road.  So we figure out a way to balance our bitcoin investment to attempt to invest as aggressive as we are able to be, without  overdoing it and recking ourselves in the process of building our BTC investment and managing it.  Even if we might have had started to invest into bitcoin in 2023, and maybe we are investing $100 per week, but we plan to continue to increase the amount of our investment into bitcoin as we are able to increase our bitcoin, and maybe our timeline is 15 years down the road.  We should still want to be in the game in 2038, and we have some  ideas regarding where we would like to be with out bitcoin, investment, yet if we are looking 13 years or more down the road, we can ONLY be directionally and ballparkedly estimating where we would like to be, while, at the same time, knowing  that we cannot know with certainties. 

We can ONLY try our best whether that is by mostly or largely focusing on bitcoin accumulation or if we might have some other matters we consider to also be high priorities for where we would like to be 13-ish years down the road.  We also might have some flexibility in our timeline, even though we have reasons for focusing on 2038 as a potential target date based on our own personal circumstances.


Emergency funds are a kind of back up funds

but

not all back up funds are emergency funds.  I would like to suggest that guys consider emergency funds as having the highest priority of not being spent, except for when emergencies end up happening, and we should be attempting to minimize the likelihood  that we ever have to tap into our emergency funds, and we are not creating our own emergencies by engaging in bad cashflow management.  In other words, if we are maintaining various kinds of back up funds, if there are irregularities  in our income and/or expenses, we should be drawing from our back up funds prior to touching our emergency funds.. and it could well be the case that we manage our lives (and  our finances) for 30 years or more and we never end up having to tap into our emergency funds.


I went back and looked at your statement and my response, and it could be that we are saying similar things, but just saying our things in different ways.  I may have had misunderstood your statement.  It is correct that if we are investing into bitcoin from our discretionary income, then the most we could lose of that investment is 100% of the amount that we had invested, and at the same time, if we are taking invested money from our discretionary income, then that should mean that we are ready, willing and able to lose that money. It is money that we don't need and we are willing to put it at risk.. since we are not guaranteed to get that money back. 

Of course, no one invests with any intention to lose, so surely we are choosing our investments based on our expectations of future value, so yes, figuring out the amount that we can invest into bitcoin and afford to lose may well become difficult the more that we invest and if our holdings might not be in profits.  So, for example, if we were investing $100 per week into bitcoin, we might not be too concerned about the first year or so while we are investing, since it is ONLY adding up to $5,200, but then after a few years, perhaps even a whole bitcoin cycle, we may well start to feel more nervous because after 4 years, we have invested more than $20k, and perhaps our investment might have had gone up in value, so our investment into bitcoin starts to become more meaningful to us, so we might get nervous about how much we had placed into bitcoin, even though we had ONLY been investing $100 at a time each week, after 4 years it really starts to add up, including if BTC ends up having some upwards movements in its price, too.   So it can be really tough for guys since the amounts that they were investing was not really that much, but then they see their investment adding up to a lot of value, yet maybe at the same time, they have to come back to considering that all along, they had been investing amounts of value that they were willing to lose, so they had not been investing from money that they needed in the near term and they also realized that it had been possible that they would never end up getting that money back.

I am not suggesting that anyone should start to become reckless with their investment value into bitcoin, merely because it had been built from their extra money stashes, yet I am still suggesting that the more the BTC grows, various dilemmas could start to occur, and even that some poor people will end up dipping into their bitcoin investment too soon, yet it could end up being the case that at some point the bitcoin price ends up going up quite a bit and so then all of the value that is kept in bitcoin ends up compounding upon itself...so it could end up taking several compoundings of the value before the person realized that keeping the money in bitcoin turned out way better results as compared to their exercising an option earlier in time to dip into their bitcoin holdings.  So a guy who had spent several years accumulating bitcoin prior to 2017, he might have found himself having an average cost per BTC around $1k, so then these days when the BTC price is going up and down by $3k to $8k in a day,  then his BTC portfolio holdings are going up and down 3x to 8x the size of his total bitcoin investment amount in relatively short period of time...but yes can take a couple of BTC cycles or more to get to such a status, and it is not guaranteed to happen.