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108 sats \ 4 replies \ @HardRich 3 Jun \ on: What Holds You Back From Going 100% into Bitcoin? How about 120%? bitcoin
I eventually plan to be FIRE and if I live off of bitcoin I'd worry about bear markets. My current thought is to have a year or two worth of income in fiat so I can tap into that without touching my bitcoin.
If/when my stack ends up being large enough such that a 80% correction wouldn't hurt then I'd go all in.
I've run spreadsheets (using historical numbers) comparing 100% BTC allocations vs 90/10 BTC/Cash allocations.
Using historical numbers, the 90/10 balanced portfolio seems to win (using monthly re-balancing).
The magic of re-balancing is that you buy dips and thus wind up stacking more sats in the long-haul. This is very dependent on the typical 4-year cycle though....and depends on a 60-80% drawdown to happen occasionally after huge post-halving peaks. If that feature keeps happening it leads to bigger sat stacks over the decades.
So, in theory it should be possible to run a 90/10 portfolio and combine that with living off the fiat portion. Constantly drawing down the fiat portion will lead to bigger monthly sales than you would normally need, but if your needs are modest + high BTC prices, it might not be a huge negative effect.
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80% of correction will always hurt, as it will be agaonizing to spend btc for life needs when it's down 80%. Or at least, that's how I'd feel.
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