Poor people might have ONLY a very narrow path of opportunities to get out of poverty, and if they spend several years building up something like a bitcoin portfolio, and then they end up screwing up their investment because of their own slopiness they might not be able to recover again... so there could be some poor persons who had spent one or two cycles building up his bitcoin holdings and he does not have much if any of an emergency fund, but then an emergency comes and his whole bitcoin is wiped out because his bitcoin was serving as his emergency fund. .and maybe if the BTC price is down at the same time as the emergency, he might never be able to recover from what he ended up losing. Sometimes also just a bit of cash can get someone over the rough periods and to prevent a bad situation from becoming even worse because the onhand cash was able to cover the expenses until the person got back on course and started earning an income and/or maybe resolved some expenses.
Bitcoin is a savings that is kept for the future. If a person creates Bitcoin as an emergency fund, then he is making a big mistake. Because investments are made for a long term period such as 5 to 10 years. And we create an emergency fund to protect our portfolio. But there are some people who use Bitcoin as an emergency fund. If you are a person who does this, then he can find himself in many bad situations. For example
*If the price of Bitcoin decreases and then that person needs money, then he will have to sell it at a loss
*If he sells at a loss, then he will be behind in terms of money and then that person will have to take a loan.
*He will break down mentally a lot.
*He may blame Bitcoin, such as Bitcoin is fake etc.
Bitcoin is very risky, but not for everyone. Because I think Bitcoin is very low risk for people who can have proper knowledge about Bitcoin and hold their holdings for the long term. Bitcoin is very risky for people who invest in the short term or use Bitcoin as an emergency fund.
Before anything else, let’s clear this up… your savings, emergency funds, and Bitcoin investment are three completely different things. They are not the same and should not be treated like they are…
Bitcoin is not your emergency fund. Bitcoin is not your traditional savings either. Put in mind It is an investment asset where you build and grow long term, using strategies like DCA over years, not weeks or months. If you’re trying to save money you might need soon, or for safety, go put it in a bank or somewhere stable. Bitcoin is not the place for that.
Now, using Bitcoin as emergency backup? That is just not smart. Emergencies don’t wait for price rebounds. Haha… BTC can take time to move, convert to cash, and sometimes the fees or even the network can delay you… What if the price crashes when you urgently need money? You will then be forced to sell at a loss. Which will now lead to you panicking, probably regretting everything, and maybe even blaming Bitcoin when the truth is, it was just poor planning.