Generally it is a good idea to figure out some kind of an investment pace into bitcoin that fits within your budget, so you should be taking ONLY from the extra money that you have, and not money that you need for expenses. Surely there are some kinds of expenses that you might not know that come up down the road, so many times it is preferable to keep both an emergency fund and various kinds of back up funds so that you never have to tap into your bitcoin investment at a time that is not completely of your own choosing.
You are absolutely correct! I have made this mistake because I know what it cost me to sell part of my Bitcoin at huge losses because I needed to attend to my urgent bills. This is not funny at all and I hope other investors would scrutinize your opinion many times so they can digest it, avoid the similar attempt in the future. It is not funny at all when you intend to hold your Bitcoin for as long as possible and suddenly you had an emergency to attend to. I just hope such unfortunate event would never happen to us. Also this was due to unplanned necessity that needed to be put in place before making any financial investment. We just have to keep some funds so that in case of any unforseen bills, one can take care of it asap.
I understand that no one wants to have a bunch of cash hanging around that is not "working" and maybe poor people who get into investing are even more anxious to make sure that they are making their cash work, yet the problem is that poor people have fewer resources to fall back upon as compared with more wealthy folks, so it becomes even more important that they maintain emergency funds and back up funds so that they don't have to dip into their bitcoin investment.
This is a big challenge to those people that don't have sufficient money to take care of their bills because they don't have enough sources of income they can depend on. Once you know that you don't have a huge source of income, it is better for the person to invest little than to invest more money and later go back to the investment so as to take care of some bills. I know that all fingers are never equal which is a good reason when we need to think well before putting fund in any investment.
Another thing is that if someone is new to bitcoin and they might not have any emergency fund, then they could build their bitcoin investment and their emergency fund at the same pace, and likely they have to be less aggressive in their investment into bitcoin until they at least have three months of emergency funds in place.. and then they can also figure out how much of the other kinds of back up funds that they need. If their income and/or expenses are quite irregular and erratic, then there surely are justifications to keep more back up funds in place because if you already know that your income and expenses are irregular and erratic, then you already know that you have to keep greater level of back up funds so that you never have to touch your emergency funds for a situation that comes about that you know could come about, since an expected situation would not and should not be considered to be an emergency, unless you turn it into an emergency through lack of proper preparations.
Having enough emergency fund is very important to every investor that really want to have an effortless investment journey in the Bitcoin market. Surely the market is going to test us many times to sell at a loss but when you already have enough emergency funds in case of anything, you will not need to panic. This is why many short term investors do end up taking less profit from the market. Sometimes they think that taking profits at a certain point when the price of Bitcoin shoots up is the best decision which is not. They have the fear that the market price might falls and might take long time to continue which is not true.