The main reason we can know quite well that bitcoin will be worth more in the future than it is worth today is this: If you ask a young person whether they own any gold, they'll probably say no. But if you ask that same person if they own any bitcoin, there's a good chance they'd say yes.
Great. Most bitcoiners don't find this new or surprising. But here's what a lot of bitcoin maxis don't understand:
The less diversification you have, the more overall wealth you need at retirement to offset the risk your portfolio crashes during the first few years of your retirement.
Said differently, if you're super convicted about bitcoin's future and you're trying to stack as many sats as you can every day, you're doing great! But you should also know and appreciate the fact that holding bitcoin as the only asset in your portfolio poses a serious risk to your ability to retire early. This risk is called "Sequence of Returns Risk".
What is Sequence of Returns Risk ("SORR")?What is Sequence of Returns Risk ("SORR")?
Put simply, it's the risk that your portfolio crashes early on in your retirement, such that when you withdraw the money you need each year to cover living expenses, you're forced to sell your assets during bear market lows.
You really, REALLY don't want to be selling your assets during a market crash. Why?
Here's an illustrative example: let's say you retired yesterday with a portfolio equal to $1M and you spend $40k per year. You plan to retire for 30 years - great! Good plan. But then something unexpected happens: your portfolio value plummets by 50% in Year 1 to a new value of $500k. Now, each time you withdraw your $40k needed to cover expenses, you are forced to sell TWICE as much of your assets as you would have been selling during a normal "non-crash" market.
Then, when the market rebounds, a much smaller amount of your portfolio is still remaining to benefit from the rebound. The end result: you lose money faster.
So what's the lesson? Easy. Don't put all your eggs in one basket.
This isn't "weak hands" advice or "boomer" thinking. This is the smart way to invest to give yourself the best chance of retiring successfully so you can minimize the amount of bitcoin you ever have to sell to maintain your lifestyle.
Cheers,
Brendan
The SORR analysis is correct but I think it understates how bitcoin specifically changes the retirement math.
Traditional SORR models assume you're withdrawing from a portfolio that can go to zero or stay depressed for years. Bitcoin has a historically reliable 4-year cycle tied to halvings — if you plan withdrawals around cycle timing rather than calendar years, you can largely sidestep the sequence risk. Nobody forces you to sell in a bear year if you hold 2-3 years of expenses in cash or stablecoins as a buffer.
The "don't put all eggs in one basket" advice assumes all baskets have comparable risk profiles. But if your other baskets are bonds yielding below real inflation or equities correlated to money printing, your diversification might be adding correlation risk rather than reducing it.
That said, the core point stands for people who are actually at retirement age today. If you're withdrawing now, a 50% drawdown with no buffer is devastating regardless of your thesis. The solution isn't necessarily diversification — it's having a withdrawal strategy that accounts for volatility. A 2-year cash runway plus bitcoin beats a 60/40 portfolio in most backtest scenarios since 2013.
And all this crap is based on fiat estimation...
You are totally wrong addressing this to bitcoin maxis.
Real Bitcoin maxis don't give a shit about the value in fiat.
This post is for fiat maxis.