I am not sure where the line should be officially drawn in terms of luxurious consumption.. 10% to 20%?  The example of 5% (spending $250k with a NW of $5 million) seems more than reasonable.

We probably need to know more about the various other frivolous stuff the guy is buying?

I have already asserted my own view that a guy's spending of 10% of the 200-WMA valuation of a guy's holdings per year is perpetually sustainable... so long as he takes a few precautions to reduce such spending during periods that the BTC spot price is less than 25% above the 200-WMA.

Surely many of us get caught up upon the spot price valuations of our BTC holdings, yet since we know that BTC prices fluctuate so much, we may frequently find ourselves becoming overexuberant in our calculations of our own wealth and/or our own possibilities.

Alternatively, we might make some alternative calculation of the value that might be subjected to a reduction of the spot price peaks, which surely is in the spirit of the right direction that comes from going with the 200-WMA, even though it is a bit of a delayed indicator.. yet even it's delayed indicator status can be used to our advantage in order to make sure that we do not overly exuberantly withdraw from our bitcoin at a rate that is greater than its expected ability to hold its value.

So let's say the question in Naiive's above tweet example were to be a person who had an overwhelming majority of his quasi-liquid and countable wealth in bitcoin, and let's say that Naiive et al may have had been getting excited by getting to a status in which BTC's spot price was starting to show $5 million in value.

So maybe he has somewhere in the ballpark of 42.612 BTC that would also have a 200-WMA value of $2.193 million.  This guy need not get overly excited about selling a bunch of his BTC, but instead he can figure out his budget by calculating a sustainable withdrawal rate, which I would consider to be $219.3k annually or $18,272 monthly.

He could choose to withdraw a whole year in advance, I would be careful in regards to withdrawing too much at once, so maybe withdrawing $200k rather than the full amount.. or if he chooses to withdraw $300k, then maybe he might need to count it as a withdraw that covers 18 months into the future. In any event there are various ways to extract value from such a decently large quantity of bitcoin without overdoing it and while also maintaining some appreciation in making attempts to have his withdrawal levels to be sustainable, and sure he can calculate if he wants to on average deplete his BTC holdings, which would mean withdrawing at a greater than 10% rate or if he would rather have some confidence that his BTC holdings are continuing to grow faster than his withdrawal rate by choosing a less than 10% per year withdrawal rate based on the 200-WMA valuation.