Quote from: Tungbulu on July 06, 2025, 06:13:44 AM

Quote from: JayJuanGee on July 05, 2025, 06:10:14 PM

Ok... so you are proclaiming that this hypothetical guy has come to a conclusion that he largely has enough bitcoin, so he does not necessarily need to continue to spend time accumulating bitcoin to the extent that you might be suggesting that up until now he had been accumulating bitcoin.

I would find it helpful to know how he got to such 92.6-ish BTC status and other parts about his personal factors - besides merely that he is changing his mindset in regards to how he thinks about his bitcoin, since I would have had considered that a guy does not just come to 92.6 BTC, and his mindset likely had already been changing little by little through the years.. and golly-gee whiz, there are quite a few different paths that the guy could have had taken to get to such 92.6 BTC, which many times would be relevant.. even though surely the mere fact that he 92.6 BTC does remain relevant in and of itself too, so I will grant you the relevancy of that part.

Well, I guess we could say that the entrepreneur's journey to accumulating over 92.6 BTC may have actually involved a variety of factors like, early adoption, of course consistent accumulation, strategic purchases like taking advantage of potential DIPs and other strategic approaches. The entrepreneur's personal factor may have likely included a very strong risk tolerance, financial discipline and a very deep knowledge of the market.

He may have eventually developed a long term perspective overtime, putting his focus more on the potential for Bitcoin's long term growth and adoption. And the more his portfolio grew, he had a shift in mindset from further accumulation to strategic wealth management, he began making financial stability a top priority as well as tax efficiency. Yeah, this mindset shift likely occured gradually as he advanced and gained more experience and confidence in his investment strategy and approach. This mindset shift I believe is a natural progression for those investors who have managed to achieve a significant position in cryptocurrency market.

The entrepreneur's decision to engage in a time based strategic withdrawal by selling 2% of his Bitcoin holdings quarterly shows just how committed he is to maintaining financial stability while also minimizing tax implications.

Sure, it is possible that such bitcoin accumulator HODLer could have had developed those various characteristics, yet I still get the sense that you are imagining a lot about mindset.. and surely I would have had thought that it might be more concrete to focus on various ways that such a guy might have had gotten to such a level.. and you don't even really proclaim a timeset in which such a guy might have had gotten to such a stage.

Perhaps we can attempt to imagine a guy who started in bitcoin in mid 2014.... and so maybe we are imagining a guy who ONLY bought bitcoin but never sold any (except maybe spend and replace), so then that would be an investment timeline of 11 years... Sure , 9 or 10 years could also work, but if we reduce the timeline, then it might cause difficulties to achieve 92.6 BTC - especially for somewhat normal people... yet as I tried to suggest I still find the amount accumulated to be quite a bit and also your assumption about the guy just all of sudden getting to 92.6 BTC seems a bit of a fantasy too, even though surely I can imagine some scenarios in which such a thing might have had happened.

Even though I am cooperating with you, I am still a bit frustrated to feel that I need to give some examples in order to potentially describe some ways in which a guy might get to that 92.6 BTC amount and ONLY now start to consider transitioning into some kind of a sustainable withdrawal status... and I also believe that you could have had come up with some kind of a vision of a guy that is more specific about what he did, what were his financial limitations and perhaps considering some goals that he might have had from the start.. so then sure, we might see the various ways that bitcoin might have had changed him, but still it seems more plausible to put it into a framework of specific acts rather than retaining vagueries within a description of how he feels about his having had gotten to 92.6 BTC.

My assumption is going to be that each of the hypothetical guys had an income of somewhere in the ballpark of $100k per year, and perhaps a goal to get to a status in which he would be able to withdraw $200k per year with a kind of passive income. I will warn in advance that I think that none of these work, because from my own point of view even in the most conservative of scenarios the guy stocked up way too many BTC in terms of his stated goals, and even a guy with a $100k per year income seems a bit unrealistic in terms of attempting to appeal to normal people.. .. but anyhow, I am trying to work with your example to the extent that you have provided any details, I am just getting that he has $10 million spot price bitcoin right now... so then what to do about it, might relate to how he got to such a point and what his original goals might have had been.. and were such goals realistic?.. or maybe a more plausible rationale is that he lost track of how many bitcoin he had, but that hardly makes sense, either... but let me see what I can do to attempt to work with what you have provided, so far.

Maybe also we can say that the guy is about mid-30s when he heard about bitcoin, so he had perhaps been investing in various traditional investments for 10 years, and so he had invested about one whole year of his income and perhaps there were matching funds and various kinds of price appreciation, so perhaps his total investment portfolio is around $200k at the time he gets started in bitcoin (we are talking mid 2014).

Hypothetical 1 (we will refer to him as a front loader).. So he may well buy his BTC in various chunks until he gets to 92.6... and since he is a front loader, he may well be taking from other parts of his investment portfolio and/or combining that with his income.. so maybe he invests around $15k the first couple of times and $8k the third time.. looking something like this.

Buy 1 - $15k June 2014 - $600 per BTC - 25 BTC
Buy 2 - $15k November 2014 - $380 per BTC - 40 BTC
Buy 3 - $8k October 2015 - $280 per BTC - 27.6 BTC

Total invested $38k

Hypothetical 2 (we will refer to him as the DCAer).. So he just started buying BTC at about $221 per week, and over the past 11 years he may well have had invested $125k into bitcoin.

Of course, there can be several variants in between, yet I still have trouble understanding how either of these guys would just start to feel that they need to enter into the withdrawal stage of their investment into bitcoin.

Perhaps a more plausible version might have had been someone who might have already realized that he could start withdrawing, so he started withdrawing a while back, since if a guy wanted to withdraw at $200k per year, then under traditional valuations, his holdings would have had needed to get to right around $5 million, and if the guy had 92.6 BTC, then his BTC spot price holdings would have had crossed over such valuation at around $54k, and we crossed over $54k a couple times in 2021 and got stuck around there for a good amount of time in 2024, and so now we are double that $54k price, and surely that is part of my own reluctance to want to be using spot prices in order to figure out valuation, yet even the guy could have had started some kind of a 4% per year withdrawal rate in early 2021, and he would still have right around 77.3 bitcoin right now, and over the past 4.5-ish years, he would have had cashed out right around $730k .

And, yeah, I know that I am changing aspects of your facts, but even a guy with 77.3 BTC currently would have a 200-WMA value of right around $3.8 million and a spot price valuation of $8.4 million, so I would consider that based on the 200-WMA valuation that he would be able to sustainably withdraw right around $380k per year. So even this guy who already started withdrawing 4.5 years ago would have had still retained much of the value of his holdings if he had merely withdrew at the traditional withdrawal rate of 4% and I personally think that if we use the 200-WMA and we price the withdrawals in dollars, then we could sustainably withdraw 10% of the 200-WMA value of the holdings, so long as the BTC spot price were to stay at least 25% higher than the 200-WMA.

Hopefully I have beat up upon some of these ideas enough, even though I continue to think that you, Tungbulu, could have had provided some kind of a better semblance of your own ideas, so that it might be more concrete what you are talking about rather than just vaguely referring to a guy suddenly having 92.6 BTC..,. even though for sure if the guy started early enough, such as 11 years ago, then there could be a variety of scenarios to get to 92.6 BTC...and the shorter we make the timeline, thent it might hav had been more difficult to get to such quantity of BTC absent perhaps some heavier front-loading and/or some various buying on dips, not expecting that the guy necessarily hit the bottom within his various BTC buys on dips, even though there could be some realistic ways to combine buying on the dip and regular DCA, and to still have relatively short timelines that might even be less than 2 cycles. (2 cycles putting us back to a mid-2017 starting timeline).

Quote from: Tungbulu on July 06, 2025, 06:13:44 AM

Quote from: JayJuanGee on July 05, 2025, 06:10:14 PM

Quote from: Tungbulu on July 05, 2025, 07:22:05 AM

And by prioritizing his financial stability, by managing tax implications and maintaining his planned allocation, he's able to optimize his financial position, while simultaneously minimizing and mitigating unnecessary risks. His strategic bitcoin withdrawal strategy enables him to achieve his specific objectives and also ensuring that he's more prepared for the future.

I don't have any problems with any of those goals, even though I consider that it would be more stable to withdraw at some rate that is lower than a strict bitcoin amount, even though I do have some funds in two of my bitcoin accounts that have been being withdrawn at a steady rate since about early 2023, even though their value went up more than 4x since then.. but I have continued to allow them to be withdrawn at the same BTC rate.. and perhaps part of the reason that I had been allowing such is based on my having had used a 4% annualized withdrawal rate, even though I know that a 10% annualized withdraw rate would likely also be sustainable.. so even though I had not been reducing the allowance based on dollars, I had been ONLY allowing less than half of the amount that I consider to be sustainable. which also just means that the remaining (not withdrawn) value continues to compound upon itself for the possibility of higher future withdrawals if needed or even not needing to reduce the withdrawal rate, even if the BTC price were to go down 50% from here or maybe even 80% at some future time.

Your withdrawal approach is indeed thoughtful and strategic I must say. By withdrawing a fixed amount from your stash, you've allowed your withdrawal value the chance to increase as the price of Bitcoin rises. This approach provides a growing income stream, but that also means that if there's a decline in Bitcoin price, the value of your withdrawal may also drastically decrease over time.

Using a withdrawal rate, such as withdrawing 4% annualized can actually help to ensure that your holdings last over the long term. Your approach have been quite conservative by allowing less than half of what you've considered to be sustainable, as it can help to provide some kind of buffer against potential downturns in the market.

In the last several years, I have been gravitating towards higher than 4% withdrawal rates so long as the valuation of the holdings are based on the 200-WMA and the authorized withdrawal amounts are pegged to dollar valuations... For probably more than 4 years, I was already presuming that guys should be able to withdraw greater than 4%, even gravitating up to 6-10%, and when Bitmover put the back tester in the tool (about a year and a half ago - here is the thread on the topic of creating the tool), I was able to see that even maximizing the rates (which it ONLY goes up to 30%) would still allow for long term growth in the value of the holdings in terms of dollars - yet I also started to think that it was too risky to peg the amounts to BTC amounts and also to go so high with the withdrawal rate when it likely was not needed and would end up overly depleting the BTC holdings, since many of us likely recognize and appreciate that bitcoin is likely the best of places to hold value, so why would any of us want to be motivated to overlydeplete our bitcoin holdings (and draw down principle of our bitcoin holdings) unless we were to have some major health event or perhaps based on our age (and no desires to pass wealth down to heirs).

Of course, there likely remains to be value to spend from other income sources prior to spending from bitcoin, or alternatively to withdraw at fairly conservative rates in order to make sure not to overly deplete the bitcoin holdings, even though surely it seems to be the case that bitcoin tends to grow much faster and better than other assets and bitcoin can even tolerate higher withdraw rates and still to be sustainable, so surely, I don't mind some level of creative aggressive withdrawal in terms of still maintaining some frameworks to try to make sure that withdrawals are not being done in ways that overly deplete the bitcoin holdings, and it still seems to me that we ongoingly witness examples of guys having regrets because they end up selling way too much bitcoin too soon.

Ultimately, even if I am attempting to share some kinds of frameworks in which guys can consider their bitcoin withdrawals once they reach overaccumulation status, there still seem to be guys prematurely concluding that they reached overaccumulation status., yet maybe even in those cases if guys might start to practice some kind of sustainable BTC withdrawal, then he can figure out some kinds of boundaries to reassess from time to time, and surely I am way more convinced that valuating based on the 200-WMA (bottom price valuations - and conservative valuations) will likely lead to more stable levels of withdrawal, even though at the same time, it seems that my suggestion that a 10% withdrawal rate may well seem high to some guys and also may well end up being a high rate if guys are withdrawing 10% of their BTC rather than 10% of their 200-WMA dollar valuation and perhaps even leaving some kind of an extra cushion in there so that the withdrawals do not end up being excessive..