Yes, emergency funds is very necessary for the sustainability of your Bitcoin investment, but a stable source of income as you said is not necessary because their are guys that has a stable source of income but still can't figure out their discretionary income, what a newbie investor need in other to invest smoothly is a discretionary income, money left after all his or her basic needs has been met, bit in the case of cold_joker, he fails to have an emergency funds in place that was why he sold off his Bitcoin holdings so as to pay the hospital bills of his friend, but if he had an emergency funds in place, he wouldn't have sold off his holdings in times like that.
Not necessarily that he never had an emergency funds, there are situations you find yourself that only your emergency funds can't solve, he must have had,
there might be that he must have spent the emergency fund on the same health issues and yet the persons health is not improving because they have not being able to get the required fund needed for the treatment, instead of allowing the person to die who is very dear to you, and you have some bitcoin that will save the persons life which you are very sure that the person will survive, is it not better to save that your family member life than allowing the person to die? and regret it, then of what value or worth are we now investing in bitcoin to meet our needs and be comfortable in life, if we cannot use it when needed.
According to what you said in the highlighted statement, it shows that you are just speculating and you aren't sure if he has an emergency funds or not, secondly,
this is one of the reasons sir jayjuangee always emphasize that our emergency funds should be big enough to sustain us for the minimum of 3 months, because I am quite positive that if he has such an emergency funds in place, he wouldn't have sold off his Bitcoin.
Remember we are investing in bitcoin to save us from future lacks and be able to take care of our family needs, so if selling your bitcoin to save a life, then it worth it, at least you should be happy saving a life with bitcoin because bitcoin has also saved you from financial stress and otherwise.
Their are two things we that makes us invest in Bitcoin, first is to secure our future financially, second is to protect our money against inflation, he got into this terrible situation because he never planned for days like this, and the purpose of having an emergency and reserve funds is for days like that, and I bet you, if he had planned for days like that by having an emergency and reserve funds in place, he wouldn't have tempered with his holdings talkless of selling everything off.
Frequently, I suggest that 3 months minimum is the target Emergency funds level that we should strive to reach, even though I also suggest that it could take some guys quite a bit of time to reach such 3 month target levels (maybe a year or two), especially when he is first building up his bitcoin investment.. so in those circumstances, he might be building up his bitcoin investment and his emergency funds at the same time.... and then once each of them has reached 3 months of expenses, then perhaps at that time such guys might start to invest into our bitcoin more aggressively, even though surely some guys might also want to continue to build their back up funds beyond 3 months, which would be reserve funds and have more flexibility in how reserve funds are used... So there are ideal standards and there may well be things that guys might choose to do in regards to both how much back up funds that they keep at any particular time. which their own income and expense circumstances can justify how they keep their various back up funds and for what purposes they might designate the tapping into such back up funds and/or the building back up of such back up funds after they have been tapped into.