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Yes, emergency funds are usually used in case of unexpected events, which should not be used in Bitcoin. But as an investor he must be prudent. We do not know when Bitcoin price drop will occur. What will an investor do if he sees a big drop in Bitcoin price at a time when he does not have money to invest except emergency fund?
First of all, you are not giving enough facts.
Second of all, on the face of it, there is no reason to use emergency funds for a non emergency and bitcoin's price drop is not an emergency.
Surely there could be exceptions to any rule.. So, for example, if the person does not have any bitcoin, then it makes no sense hardly to have any emergency fund, since what would the emergency fund be protecting?
Many times, we have spoken about growing bitcoin and the emergency fund at the same rate, until the emergency fund gets to 3 months of expenses, and then at that point, the bitcoin could grow at a faster rate than any further back up funds (such as reserve funds) that might be built up.
If your emergency funds are greater than your bitcoin, then it may be acceptable to use them to even out the size of the bitcoin and the emergency funds.
If your emergency funds are greater than 3 months (of your expenses), then the portion excess of 3 months could well be considered to be reserves rather than emergency funds, and so reserves can be used for anything, including buying bitcoin (whether on dips or not).
If he has money at that time but is missing a big opportunity due to being away for a while, then I do not see anything wrong with using emergency funds.
You are being unclear. How much money is he having? Is he having ONLY his emergency funds? and is his emergency funds smaller than his bitcoin holdings? Is his emergency funds smaller or larger than 3 months of his expenses?
Buying dips is not an emergency and tapping into your emergency funds for non-emergencies seems like you want to gamble, unless you have som justification for how you are playing it and how long (and how certain) to replace whatever funds that you are using.
The main point here is that if you can complete the work with the money you get in a very short time with emergency funds, then it can be used. But if there is no possibility of getting that money quickly, it would be a mistake. In that case, using emergency funds can cause losses.
I agree with this part.. so there are some devils in the details and there could be some discretion in regards to circumstances in which you might not be crossing over even self-imposed prudent limits, even though you have to be careful about going beyond some of your own parameters and figuring out if the amount of risk that you are taking and the duration of that risk is actually valid for your situation.
I still have trouble seeing how the BTC price being down is creating any urgency for buying, especially if you are ongoingly buying and if your investment timeline is likely 4-10 years or longer, then each increments in which you are buying bitcoin is not going to be making great differences in your bitcoin stash or even your average costs per BTC..
It seems to me that the bigger opportunities for accumulating greater amounts of BTC come when guys are able to front load their investment or they receive lump sum payouts, so there surely could be ways that guys are able to generate payout days or to receive extra income through work so that they can buy more bitcoin, and so surely I am not against the idea of being as aggressive as we are able to be in accumulating bitcoin, but we still have to make sure that we are keeping emergency funds and other back up funds available.. and so if we are getting our back up funds down to the point that we ONLY have emergency funds remaining, then we are already likely putting a considerable amount of strain on our finances and/or our psychology.