We have three strategy in Bitcoin investment which are: DCA method, buy Dip and lump sum so using emergency funds to buy or accumulate Bitcoin is not a strategy rather it is a wrong investment approach or idea because you will definitely sell pre mature and again the reason we shouldn't use our emergency funds to invest is not because of market downturn but rather it is because of unforseen circumstances that is challenges that will come up during our period of investment and so if one uses the money he or she would have used to solve this problems to invest in Bitcoin then they will have no other choice than to sell there investment so market downturn is not actually the reason why we shouldn't invest with our emergency funds so don't get it twisted.
And as for market downturn people who suffers it are mostly traders who sometimes buy with huge amount of money hoping to sell when the market pump and whenever the market is going in the opposite direction they will sell off immediately and that is loss.
Yeah, using emergency funds for investing in Bitcoin is not the right thing. He use that funds for an urgent need and if he use that funds to buy Bitcoin, he will sell his Bitcoin when he is in urgent situation. That means, his investment will not increase but decrease along with his needed. Besides that, if he sell his Bitcoin when the price is down, he will use more satoshi than the funds that he invested before. That is why his Bitcoin investment will decrease.
He need to have a separate fund for his emergency fund. That apply to all investor so he can learn discipline to allocate his earning or salary to the right place.
Investing in Bitcoin with an emergency fund can cause more losses for the investor. Because if an investor invests in Bitcoin with an emergency fund, and after some time if he needs the money, what will he do? Then he will have to sell his Bitcoin holdings compulsorily, and if the price is low due to the volatility of Bitcoin at that time, he may also suffer losses. So these should never doing any time, danger can come at any time, when you need money. So the emergency fund should be used only for emergency situations. Using it for other purposes means destroying your protection charm.