I would think that 3 months of an emergency fund would be about the bare minimum to have if you are going to start to act boldly.. and even with ONLY 3 months of an emergency fund, you gotta be careful about ever dipping into such emergency fund except for strict emergencies.
If you have 6 months of an emergency fund and you know that you are never going to let your emergency fund dip below 3 months unless you are int he midst of a true emergency, then you can be a lot more bold because you might even float one of the months so that you are mostly between 4-6 months in your emergency fund.
I guess my point, is to be careful if you are starting to get a lot of BTC investment and if you are starting to use more adventurous times of investing, including getting a 30% advance of your pay for 3 months or any of those kinds of things, even though it might work out, you seem to be playing with fire if you only have 3 months emergency and you also get a 3 month advance for 30% of your income... it may well end up working out, but it does not seem like a good balance especially if you might be in a position that you don't want to end up getting forced into selling any of your BTC at some inconvenient time, for example when it might be dipping extensively.
I think the 3-month emergency fund is enough as long as we can maintain our cash flow so that your expenses and other sudden needs can be covered from the main cash flow, but when things are out of control in a tight sense then use the emergency fund as long as it can save you.
If the emergency fund is sufficient for 6 months then it is enough for them to be free in targeting aggressive investment levels and even if the emergency fund drops but it is still at the minimum limit, when the cash flow has stabilized, it may be possible to refill it again slowly so that the emergency fund returns all to hold for 6 months.
With those who use challenging investments, I think it needs to be felt because it will adjust in the future how the balance is more sensible including 30% of their total salary, I can only do it when the emergency fund is safe, say 6 months in the bag, then the level of aggression towards BTC must be done if it is not appropriate, the percentage will be lowered, if I am still able to continue because this depends on managing expenses and the percentage determined, the cash flow will be easy to manage.
You are not wrong to suggest that 3 months might be a sufficient size for an emergency fund for someone with a relatively strong cashflow (income), yet I have been doing these kinds of things for years and years, and I probably have had relatively strong cashflows since the late 90s.. yet prior to that, I had periods of more inconsistencies in my cashflows.. nonetheless, even with strong cashflows, things can come up, especially the more complicated that we might start to get into pushing aggressiveness in our investments (including BTC), and so the more aggressive and purposeful that we are, the more that we likely need to plan the various ways in which we might end up having to dip into our reserves, our emergency fund and our float might get depleted, so then there would be priorities regarding which ones to dip into first, so the longer that we are investing, the more likely that we have more and more sources of value that we can dip into,
and when we have more places that we can dip into, then some of those various sources can end up serving as emergency funds, so then a question might come about which one is most liquid in the event that some kind of an event happens in which we need cash that is paid in a certain kind of way (most likely dollars or fiat, and even if we might have the debt payable in bitcoin, it is still likely denominated in terms of how many dollars it is worth to settle the matter.. such as our roof caving in or our getting run over by a bus, or some family member suffering a sudden illness or accident or the crashing of the personal car that is used to earn income and to keep our job.. or whatever). We cannot always realize how quickly that liquidity could end up drying up.. and if we had wanted to make sure that our money was working for us rather than being under our mattress, we might have to think about how fast we can withdraw from accounts 1, 2 and 3 in order to satisfy our debt, whether it is due right away or if some of the bills are coming in over the next 30, 60 and 90 days.
And, some folks mentioned parents, and sure it could be true that family members could be part of our emergency fund, but some of those funds could dry up too.. so that is one of the difficult balances with emergency funds that likely are not really needed to the full extent, but when they actually are needed, they could end up saving us from financial ruin... because who would want to spend 3-4 years or more investing in bitcoin, and then end up having to start over.
Even if we go by your forum registration date $crypto$, you have close to as much time registered on the forum as me, so it is quite possible that you have had some decent abilities to both build your bitcoin holdings, but also to even get your holdings to be in decent profits, even if you might have had made several mistakes along the way, but would you want to end up having to cash out of large percentages of your BTC holdings merely because you failed refused to make sure that you have 6 months of various kinds of funds rather than settling upon 3 month bare minimum kinds of standards.
By the way, I realize that if you might have several years worth of income invested into BTC or that your BTC holdings has appreciated to several years of income, then you likely could be in a better position to ONLY hold a 3 months emergency fund because the other 3 months could come from your BTC holdings and even if the BTC price dropped below $30k during such emergency, your holdings are in sufficient profits... but let's say for example, your emergency had occurred in late 2022 and BTC prices were bouncing between $15,479 and $17,500 for a couple of months, so even if you had a few years worth of income saved up in bitcoin it could be quite damaging to your BTC holdings to have had been forced to sell 3 months or so of the value of your BTC holdings during that time, and it could well end up being the case that you might never be able to get those BTC back for anything close to the price that you ended up selling them.
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Emergency fund means to use that fund in times of need. We have three months of funds but we will continue to invest these three months if we invest regularly for three months then this fund will remain intact for the next three months. These funds will be spent when we fail to make regular investments and when we do not have money to make regular investments. When we don't have money with us but we are forced to invest money from that fund. I created a three month emergency fund and out of these three months I was able to invest regularly for two months and one month I could not manage the money for investment but one month's money needed to be withdrawn from my fund. If one month's money is taken from the fund, two months' money is left over and next month of course I can manage the money and try to add back to the fund the amount of money spent from the fund. After spending money from outside the fund, if we add one month's money to the fund again, the fund is enriched again. If we use the fund in this way then the fund will never run out of money and we have to use the fund in this way.
Your own situation shows part of the problem of having non-emergencies in which you are drawing from your emergency fund, so you are using your emergency fund as a float and/or as a reserve.
Another problem is that a guy who might have monthly expenses that are $1k and income that is $800 to $1,800 with most months having $1,200 of income, it could take him 5 months to replenish the $1k that used from his emergency fund.. because look, a 3 month emergency fund should be able to cover 3 months of expenses, which in this case is $3k. the reason that it may well end up taking 5 months to replenish an emergency fund is that because in the scenario that I point out, many times we only have a fraction of our monthly expenses that we could set aside, so just to get up to a 3 month emergency fund it could take us a year, depending on our cash and your expenses situation and maybe we can increase our income and decrease our expenses so that we can build up (or replenish) our emergency fund faster.
So another thing is having the $3k emergency fund, but also to have float and reserves, so most likely you are never dipping into your emergency fund absent some real emergency and you are likely going to avoid emergencies because you have float and reserves....
Maybe another point is that many of us might think that we are doing so much better than normal people who ONLY have floats of 2-4 weeks, so they hardly even maintain an emergency fund, and they might not even have any investments; however, we want to improve our condition, we likely need to make sure that we do not engage in risky behaviors that is going to put us exactly back in the place that most normal people operate - that is without investments and without any kind of meaningful emergency funds, float and/or reserves.
Remember that November 2021 is the all-time high price, we are waiting coming November to repeat this(but targeted $170k).
Of course new ATH is not guaranteed, but surely seems quite possible and probable and something that we could invest into bitcoin because we consider bitcoin to be an asymmetric bet to the upside.
Another thing is that $170k by November seems to be pushing it, and that would ONLY be a 3 year cycle from the previous ATH.
Sure $170k is possible for his year and also $500k or more is possible for 2025, yet none of these are guaranteed, but any of us who are buying bitcoin now should try to figure out if we are doing enough in our current BTC buying efforts, and also to have some plans regarding how we might deal with a variety of possible scenarios which include at least the following in the next 1-2 years
1) that BTC prices do not go up from here ($49,048 is our high for the next two years).
2) BTC prices go up but do not breach $69k
3) BTC prices go up to somewhere between $69k and $120k
4) BTC prices go up to somewhere between $120k and $200k
5) BTC prices go up to somewhere between $200k and $500k
6) BTC prices go up to somewhere between $500k and $1.2 million
7) BTC prices go up to somewhere higher than 1.2 million
Any of those scenarios are possible, yet they have varying levels of probability (in which each of us is going to assign differing probabilities), and any of us should be able to keep in mind the various possible scenarios and to assign probabilities to them.
I have not yet made any new assignments of probabilities for this cycle,
even though I had done so in the past... for both upside and downside scenarios and in regards to both price ranges and also timelines, and even if low probability scenarios end up playing out (in accordance with our own projection of probabilities), there is no reason that we should not have some level of preparation for BTC prices to go in either direction.
That's why aside for long preparation and having a emergency fund set much really better if we are also aggressive learning a lot of information needed before investing on bitcoin so that we can save up ourselves to any negative possibilities and we would not easily get affected if there's fud scattering then here we are having a lot of bitcoin holdings since we provably lose with that if caught up by fuds spreaded by some people who want to destroy the patience of people trying to hold their coins for long time.
This is why you must have the believe in bitcoin before investing. Also having a bitcoin target and staying focus on your consistent and persistent accumulation through DCA weekly or monthly is very important as a newbie and you need to turn deaf hears on whatever anyone is saying against your passion of holding bitcoin. There are so many news that one will hear and so many discouragement during your accumulation stage, but let that not distract you from reaching your goal. If you also see bitcoin as a lifetime investment, and will be passed down to your children, this will even be better because you will not get carried away with FUDS.
One thing that I love in bitcoin, is that the more you are hodli and accumulating, the more you will begin to understand that if bitcoin dips, it will definitely bounce back due to your experience in market. I could remember that @JJG said that during his early days of accumulation, people made fun of him that he is wasting his time and money that bitcoin will crash. He even said that when bitcoin price got high in the bull run, someone I don't know how close the person is to him, though, told him to sell all and take profit but he refused and the person called him a fool, but look at it now he has grown his bitcoin portfolio to the maintenance stage now, who knows if he has reached the fuck you status.
Don't listen to any news or anybody when you are investing in bitcoin because a lot of people will discourage you from the media, friends and family but just stay focus and when you have grown your investment to your bitcoin target, you will see them as that fool that you were seeing you as in the beginning. It is your choice to decide if you will listen to fud or not.
It can be a bit frustrating to have relatively smart people to be advising about how to manage the bitcoin investment situation, and even to be engaged in such advice in a fairly forceful way because they looked into the matter. I specifically recall several conversations with a person who I had employed as a kind of consultant, and I was consulting the person in some related ways but not specifically financial, even though the person found out about my finances, so several times, I had to tell such consultant that they are trying to advise me about an area in which they do not seem to have enough information and have not studied even close to as much time as I had studied it.
I acknowledged that I might not be correct about my approach or even the price direction that BTC is ultimately going to end up taking, but I also asserted that I had invested with money that I do not need for the next many years (and maybe I will never need the money because it was extra discretionary money that I had used), but the person insisted and continued to study bitcoin, but mostly would come back to me with various mainstream talking points rather than really understanding what bitcoin is/was.. and even when I said that I was wasting my time engaging with the person and I would try to explain, the person continued to remind me on a periodic basis.. especially during 2015 when my portfolio was at its worst.. the most in the negative that it ever had been.
I did not really hear from the person in 2017 when BTC prices shot up and largely went 78x higher than the 2015 prices, and even when BTC "crashed" in 2018, the prices were still mostly 16x higher (or more than that) than they had been in 2015, so it is kind of crazy how matters end up playing out.
By the way, I am not suggesting to completely ignore other people because sometimes it is good to engage with other people and to get varying perspectives about the world or about our investment choices, but at the same time, we likely have to figure out our own ways to balance our level of exposure (to bitcoin or to any other investment) to consider if we are not using funds that we actually need in the short-to-medium term and also realizing that there could be scenarios in which we end up losing most if not all of our investment, even though we should also be accounting for those kinds of negative scenarios too.
And, so I am not even claiming that in 2015 I knew which way BTC prices were going to go, even though I tried to prepare for a variety of scenarios, and so I had even considered that it could well end up being that bitcoin would have a around a $3k to $5k top in the next cycle, but I did not really know how long it would take to get there or even if it would actually get there, so when the BTC price ended up shooting through $3k to $5k in 2017 and going up to $19,666, I did continue to sell small amounts of BTC on the way up, but I did not sell large portions, and I have no regret about that even though surely there could be ways to make more money when there ends up being more than a 80% price correction.. but we do not necessarily know that more than 80% price correction is going to end up happening or when or if it might keep correcting even beyond more than 80%.
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Grayscale bought 635,236 BTC by September 14th 2022 at a price of $20,185, a classical case of
Buy the DIP but in the words of @Wind_FURY, they were holding and not HODLing. Hence they started selling July last year when the price rose to $29,233, which is 45% profit, actually a nice profit for an investment that is less than a year. They continued the sell, even till this week and no one know their plans or target.
That is not true.
Grayscale has clients, so their BTC holdings need to reflect their client's holdings. Sure Grayscale does own some of its own shares, but it is not even close to the the number that you are giving.. so Grayscale only has discretion in regards to it's own shares, not the shares that are held by their clients.
It might actually appear that they are booking nice profits from what we see so far but how well they can manage it is what will determine the end. The question is, will they be able to replenish their holding?
They do not need to replenish their holdings. Their BTC needs to reflect the hodings of their clients... so yeah they are losing clients, but they are still making fees on whatever clients remain.
Or they exceeded their BTC quantity objected and are selling part of the surplus to HODL the balance further? When will they stop selling and what is their plans for selling?
Doesn't likely matter as much as you seem to be making it out to matter. There are various ETF's that are going to need to buy bitcoin, and even if there are periods in which GBTC sales are higher than the other ETFs, so net outflow rather than net inflow, it seems to be that mostly the ETFs are both creating net inflows and also that there is going to be ongoing continuously more demand for bitcoin in the coming months and years because the ETFs open bitcoin to a lot more possible clients who would otherwise not buy BTC directly.
Is their plans to sell and drop the price to buy again? These are questions that are not easy to answer as only time will allow us to know.
Again, does not matter that much in the whole scheme of things, even though you are repeating yourself, so you seem to believe that it matters. Maybe you need to step away for a while rather than getting worked up about stuff that does not matter very much in the whole scheme of things.
One thing that is certain is the fact that it takes a whale to move the market, a small investor cannot possibly go this route without being burnt unless perhaps he is well versed at technical analysis even when there is no guarantees that it will work out.
Markets are also moved down by more selling than buying and they are moved up by more buying than selling, and some of those kinds of movements do not come from whales. In other words, there are all kinds of places in which bitcoins are sourced, and there are ONLY 21 million coins, and some folks are not selling at these prices, so the various new entrants into bitcoin are going to want to get their coins from somewhere, and good luck with that. Good thing that there is a lot of FUD out there keeping normies from buying BTC and even contributing to some of the normies to sell some of the coins they have with expectations to possibly buy back lower, which they may or may not have any luck in being able to accomplish. Hopefully you are not selling and expecting to buy back lower? or overly holding off buying because you believe that BTC price may well be going lower? Yeah, they might go lower and they might not...
Based on this, it is safer to HODL than to hold. The former seems to be long term target while later seems to be short term target which I supposed is what Grayscale is doing.
Hopefully you figure out for yourself what to do. Grayscale is operating a business so they might sell some of their own shares and they might not. I am not sure if the reports are clear about that, but if clients sell their shares, Grayscale has no choice but to sell the same amount of BTC that back those shares. And those clients might get into BTC in some other avenue (such as a ETF or even buy directly) or they might not. But it also could take several days between the selling on grayscale and the buying in some other ETF... that seems to be part of the dynamics of "in cash" redemptions rather than "in kind" redemptions.. not that any of that should matter very much either in terms of any of us who are accumulating bitcoin and potentially having more opportunities to stack more sats to the extent that we are not scared away based on these kinds of likely temporary dynamics.
By the way, we have not even bounced out of the don't wake me up zone which is $35k to $55k, and so I am not sure why anyone would be caught off guard by a wee bit of BTC price correction of a mere 21.5% downity , especially after we had experienced a 81% UPpity since mid October.
In the scheme of things we are likely in quite positive places even if you are hearing about various nonsense doom and gloom talking points.
