By definition, you can spend your discretionary income on whatever you like, which includes investing up to 100% into bitcoin.

Personally, I think that you are lying to yourself if you are saying that you are investing 100% of your discretionary income on bitcoin, since people frequently will have some discretion in some of their expenses, so you likely have various kinds of food that are more luxurious so you are spending on food more than what you basically need.  The same is true with your rent and perhaps other expenses that you have.

There are also some expenses that increase your income or increase your chances of getting more income, and sometimes you might not exactly be able to measure what makes a difference, including that there is value in eating nutritious foods that may or may not cost more, but may well improve your energy and improve your income.  With utilitiesw sometimes there can be ways to save on your utilities, yet if you are paying for electricity, sometimes it will be better to spend more on electricity, and sometimes you might be able to earn more income from having a car rather than a motorcycle, even though cars cost more.   

There also might be some social things that you can choose whether or not to spend money, and sometimes if you show generosity, people will like you more, help you and even end up saving you money based on your spending money on them. 

Also sometimes if you wear nicer clothes, you will be invited into better quality social circles, yet still you are technically correct that you can spend up to 100% of your discretionary income on investing into bitcoin. 

By the way, you seem to acknowledge the importance of the emergency funds ,yet there is also discretion in terms of how large are your emergency funds and the extent to which you refresh them and/or use them for saving up for bigger ticket items.  Let's say for example you have a crappy smart phone that does not have very good functionality, and so you know that if you spend something like $500 on a new (or even a good quality used) smart phone, then you will likely become more productive and you might even be able to get some better quality work, so that instead of working 60 hours per week for your current income level, you will be able to work 45 hours per week, while earning 20% more... (maybe you need to improve your data plan to $10 more per month too - once you get the new phone.  So you really want to set money aside to be able to get the new phone and the other expenses, yet you consider that you are going to need to save for a few months before you are able to accumulate enough money.. so surely you have dilemmas regarding how much of an extra fund to create or even other tactics that you might take to spend some money so that you are pretty sure that you will be able to make more money and also save some time too... such as 15 hours of more time available per week with the new arrangement.  These can be tough decisions sometimes to rush a process or just to stay balanced and perhaps make the change 2-3 months down the road once you have accumulated enough savings (presumptively using your reserve funds) to get your cash level up to the amount that you have the extra $500.


You are largely correct that money that you can afford to lose could be up to 100% of your discretionary income, yet many times people do not think about their discretionary income like that, since an overwhelming majority of people (especially normal people) spend some portion of their discretionary income on things that they want, whether it is going out to a restaurant or perhaps buying name brand sneakers, or having a few drinks at a bar, or buying a bicycle for their niece, so there is some value in present consumption rather than future consumption that might not happen.  There are also psychological components, so even if you have a lot of faith in bitcoin, you likely still need to take care of various psychological needs, so if you spent 2 years building up your bitcoin holdings, and maybe you are not really in profits, and then all of a sudden, the BTC price drops, 30% and you are pretty upset, and then it drops another 50% from the 30%, which then causes you to be right around 50% down, and then it drops another 40%, so then at that time, you are a total of 70% down, and you are supposed to be buying more BTC the whole time, and maybe you keep buying BTC, yet at the same time, you are feeling like you are running out of cash.  Maybe you were investing around 20% of your income into bitcoin, but then once the BTC price started crashing, you started to put 25% to 30% of your income into bitcoin, so maybe you have invested the equivalent of 60% of your annual income into bitcoin.

You could even become psychologically weak from the whole situation, and some folks might have had been telling you not to invest so much in bitcoin and then now they are telling you "I told you so", and they are even telling your that you could have had 3x more bitcoin if you had not been so aggressive in buying bitcoin "at the top."  Maybe it even takes 1, 2 or even 3 years before the BTC price starts to seem like it might have stopped dropping and staying flat... but you are still in the negative with how much you put in as compared with how much your BTC holdings are worth.  If you can tolerate all that negative BTC price pressure, then sure maybe you have invested no more than you can afford to lose, but you are going to end up being financially and psychologically challenged if the BTC price moves against you... so you actually need to find some balance in which you are both financially and psychologically comfortable, which is also part of the reason that many people are not going to invest 100% of their discretionary income, and maybe they will find some way to be aggressive without over doing it, but maybe invest around 50% or 60% of their discretionary income into bitcoin.. so then they have the remainder of their discretionary income as a kinds of cushion.