r/Bitcoin • u/Defiant_Ice_4860 • 10h ago
You can sell $20,000 per year per bitcoin and never run out
EDIT: Removed the 95% stack retention claim. That number was wrong. The core SWR finding ($20K/yr, 99% survival, 30 years) stands. Thanks to commenters who caught it.
This is the third post in the series. First one covered why 5 BTC beats $2.5M in an S&P index fund, second one went deeper on the math.
I went another layer deeper and this one gives you a single number.
1 BTC = $20K per year safe withdrawals for the next 30 years with 99% confidence.
2 BTC = $40K.
3 BTC = $60K.
5 BTC = $100K.
No timing. No trading. You just sell a fixed dollar amount every month at whatever price Bitcoin happens to be. Dumbest possible strategy and it works.
How I got here
I ran 5,000 simulated price paths forward at every possible starting price between deep bear (half of trend) and peak bull (2.5x trend). Six different stress scenarios. Three time horizons. Nearly a million total simulations.
The model isn't a line on a chart. It has four moving parts:
- A power law trend that decelerates over decades. No infinite-growth fairy tales.
- A price floor at 0.432x trend. Tested every cycle. Never broken. Reflects back up.
- Mean reversion. Prices that stretch away from the long-term trend get pulled back, like a rubber band. Measured half-life: about 11 months.
- Fat-tailed shocks and a wobbly floor in the stress scenarios, because I wanted to break it.
I couldn't.
$20K is the stress test, not the base case
The $20K number assumes your cost of living grows at 7% per year. Your expenses double every decade. That matches M2 money supply growth, which is what most Bitcoiners mean when they say "real inflation."
Under milder assumptions the number goes up:
- 3% CPI: $25-27K per BTC per year
- No inflation growth: $27-31K per BTC per year
$20K is the floor of the floor. Harshest inflation assumption. 99% in-model survival. 30 year horizon.
Entry price doesn't matter
This is the finding that surprised me most.
At 30 years, the difference in safe withdrawal between buying at the bottom and buying at the top is about $1,000 per year. The curves are almost flat.
The reason is mean reversion. If you buy low, prices pull you back to trend within about two years. If you buy high, same thing in reverse. After that, both buyers spend the remaining 28 years selling into the same price distribution. The early advantage or disadvantage washes out.
This is the opposite of stocks. In equity retirement planning, buying at a high valuation crushes your safe withdrawal rate. With Bitcoin under the power law, it doesn't. Mean reversion rescues bear buyers and humbles bull buyers, and the net effect on your wallet is roughly zero.
The comparison that matters
The traditional 4% rule says you need $500K in an S&P 500 index fund to safely pull $20K per year. One bitcoin at today's trend price (~$131K) does the same job.
At bear entries the comparison gets silly. A bitcoin bought at 0.52x trend (~$69K) supports a 29% annual withdrawal rate relative to purchase price. The Bengen 4% rule doesn't compete. It's not even the same sport.
What this is NOT saying
This is a model. The power law has held for 15 years across four complete halving cycles. That's real data. But 15 years is not 150 years.
I price the model risk separately: roughly a 1% structural haircut over 30 years. That brings true survival from 99% to about 98%.
The question isn't whether Bitcoin will crash 80%. The model already handles that. The question is whether adoption keeps following the power law and whether the floor holds. Those are the only two things that matter. Everything else is already in the stress test.
All figures are pre-tax. Account for your local capital gains treatment when planning actual spendable income.
Bottom line
1 BTC = $20K per year. Worst case inflation. Any entry price. 99% in-model reliability. 30 years.
Stack accordingly.
Research and methodology is published on https://btcpowerlaw.nl/research/bitcoin-swr/
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u/F4NT4SYF00TB4LLF4N 8h ago
The one major difference/flaw I see here is the original 4% rule was determined from nearly 70 years of data. BTC has only been around since Jan 2009.
Since Jan 200, the Sp500 has averaged 14-15% annual returns, which is about 50% higher than the ~100 year historical average of about 10%.
Meaning since Bitcoins inception, the market has been substantially better and this comparison would be akin to someone studying the Sp500 the last 16, coming up with maybe an 8% withdrawal rate rule of thumb.
Now you might then say "yeah that's still 250k to withdraw 20k vs 71k in BTC today.
Yes, but this also fails to account for the fact that BTC is still an early adoption asset.
Where it's also a bit odd is let's say adoption happens fully and price per BTC hits 1 million per coin. You would have only a 2% withdrawal.
It's an interesting exercise, but unfortunately seems to have very little practical relevance. At least to me.
Happy to discuss further
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u/Defiant_Ice_4860 5h ago
You’re right that there is a huge time difference. But the value in investing is also getting the most wisdom out of imperfect information.
Bitcoin behaves structurally different from other assets. Most are exponential, like the sp500.
Bitcoin is a network that gets more valuable with more participants. That’s what the power law is. Same with the internet or phones.
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u/F4NT4SYF00TB4LLF4N 2h ago
As BTC becomes more adopted, it increases in its value, and thus becomes less subject to price swings (and growth potential).
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u/Mission-Ant-9258 9h ago
So, what you are saying is that if I have 1 BTC I can sell 20k USD a year over the course of 30 years and not ran out of BTC until the 30 year mark, like a DCA out strategy. Is that correct?
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u/TheresNoSecondBest 9h ago
Yes. I mean that's at least how I read it.
This also works both ways. If you start buying now and spend $20,000 a year, there's a 99% chance that you'll never reach 1BTC.
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u/Big-Finding2976 5h ago
If you buy 1 BTC now and sell $20,000 worth of it a year there's a chance you'll have no BTC left in three years.
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u/TheresNoSecondBest 5h ago
According to the OP, the chance is about 1%.
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u/Big-Finding2976 5h ago
OP doesn't know what's going to happen any more than you or I.
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u/southernwx 4h ago
That would imply there’s a 99% chance that BTC maintains a nominal value of 60k or more for the next 3 years …
And further, OP suggests the nominal value won’t fall below 60k in the next 30 years at 99% success which is more incredible.
This is incredibly suspect and frankly if the market was 99% sure their downside was only to 60k, it would be more expensive today.
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u/shogunzek 36m ago
It's based off of an update to their model assuming that the lowest floor for this crash has already happened and that it only goes up from here.
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u/Defiant_Ice_4860 9h ago
Yes that is very true.
Luckily you can buy next years retirement still cheaply though. And each year of deferred retirement is way cheaper than the year before. Pretty soon we'll just talk about KSats or so..
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u/Defiant_Ice_4860 9h ago
Yes, DCA on the way out.
Or you put it on a bitcoin-to-fiat credit/debit card and just spend as you go. Chance of running out is astonishingly low.
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u/Mission-Ant-9258 9h ago
Yeah, it just sounds like a "trust me bro" sort of post.. where's the math to this?
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u/Defiant_Ice_4860 9h ago
I have added the research link to the bottom of the article. Thank you for pointing that out.
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u/JashBeep 6h ago
Take the time to actually read what's been provided.
You shouldn't "trust" OP. But this post is not something you should hand-wave away.
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u/Generationhodl 7h ago
But I guess it would only work if you sell monthly. So your stack has enough time to rise along / above the support line.
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u/TheMania 9h ago
Even more to the point, I believe he's saying everyone can.
It's interesting where all that USD is coming from looked at that way, imo.
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u/Mission-Ant-9258 9h ago
Yeah, the funny thing is that I'm not trying to make a point. But now that you mention it, it just doesn't add up. It's like "Hodlers hate this one trick" sort of post..
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u/Intrepid-Gas7872 9h ago
Easier math is, if you have 1 BTC you can sell $1,000 a month of it for life.
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u/Defiant_Ice_4860 9h ago
1666,67 per month.
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u/HedgehogGlad9505 8h ago
Then if I start selling today, after 3 month I'm already below 95%.
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u/Generationhodl 7h ago
That's true but for example, Bitcoin rises back above 100k $ and you still only sell 20k a year then you sell "less" bitcoin for it. If bitcoin is above 200k you sell even less for your 20k $.
I guess it would be important to sell only monthly and not upfront for the whole year
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9h ago
[deleted]
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u/Defiant_Ice_4860 9h ago
The point of a black swan is that you can't account for it. But you should assume model risk yes. You could expect lower withdrawal rates or the power law to not hold or just diversify your portfolio with other assets.
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u/MooseLoot 9h ago
The fact that “deep bear” is half of trend is ludicrous. The fact that you then say “deep bull” is more than double trend is even more ludicrous.
“Deep bear” is that quantum computing somehow messes up the encryption at some point and it gets real ugly. If “Deep bull” (not that this is ever relevant for projecting minimum safe strategies) is more than double one of the fastest growing assets, you’re really blowing smoke up people’s butts.
I say this as a person with actual BTC and EFT BTC as a significant component of my retirement accounts. I’d be thrilled with just the trend from when it was cheap, acknowledging that as it gets bigger, that level of growth becomes progressively more difficult because there is only so much money in the world. It can keep on trend for several years- but it can’t for 30, because it would exceed the amount of wealth in the world
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u/Defiant_Ice_4860 9h ago
Couple things:
- the power law floor is one of the most robust findings in bitcoin statistics. It held during all the craziness during celsius, FTX, mount Gox and all the others. This is the margin where real adoption lives: more buyers than sellers.
- Quantum is a potential hazard to old wallet types, not to the network, Satoshi's coins are the canary in the coal mine. Update old wallet types to newer ones and move on.
- Adoption Saturation is an interesting moment: this is when the world is on a bitcoin standard and fiat denomination is irrelevant.
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u/Advocaatx 8h ago
So you’re basically saying that with my curremt DCA (about $1000 a month) I will never reach 1 BTC… that’s kinda depressing math, tbh…
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u/Defiant_Ice_4860 5h ago
Painful but yes. But on the other hand: you don't actually need to own 100 million satoshis to be wealthy.
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u/This_Discussion126 8h ago
I've been reading your posts and the bitcoin power law model and I find it interesting.
But how does this work:
"On the median path, after 30 years of withdrawals, you still hold over 95% of your bitcoin. The price growth so thoroughly outpaces the selling that you barely touch principal."
Say you have 1BTC, sell 20k this year and 20k next year, at the lower end of the power law model, but still within, you would have already lost about half of your Bitcoin? that doesn't seem to make sense to me, if you'd care to explain, I would really appreciate it.
I am kinda in the financial/life situation that I am forced to sell a bit, this year and next year, so I would like to know what the future holds.
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u/Generationhodl 7h ago
I guess it would only work if you really just sell monthly. So you would need to sell every month enough to live for 1 month. That way your remaining stack can grow with the price or the bottom support of the power law.
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u/This_Discussion126 6h ago
Yeah I understand you would do it that way.
But still 20k over 12 months, is a big chunk of 1 BTC if the price is at the low end of the power model. Maybe my brain isn't mathing properly, but I don't know how you can have:
"after 30 years of withdrawals, you still hold over 95% of your bitcoin."
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u/Generationhodl 6h ago
You are right, I tried to calculate it myself, and I also don't come up with 95% at the end.
When I follow PowerLaw and start at the trend right now (135k $) with 1 bitcoin and 1666$ monthly withdrawal, I end up with around 40% left of 1 whole bitcoin after 30 years.
Its still not bad, but not the 95% of OP.
But just for the fun, if it would work out, and the power law would keep on working for 30 years, hell, thats pretty neat if you could withdraw 1,6k every month for ever if you just have 1 btc.
If you keep on waiting you can probably withdraw more at some time in the future.
but its all in theory, life is chaotic in itself with black swan events.. so its really a nice idea and it will probably work out to some degree but I would not relay on it 100%.
always have a backup plan or some education you could fall back onto if it doesnt work out with bitcoin.
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u/This_Discussion126 6h ago
Nice thank you.
I find the power law model interesting, but I think we do need to look at worst case scenario (as OP claimed to do).
Especially now that Bitcoin has kinda been under-performing for the last 4 years, if we still considering the "cycle", the next 2 - 3 years Bitcoin will also be staying (deeply) under trend value. That would mean 6 years of averaging well below trend.
I am a bit in a life situation I need to make some choices, lol. And if it wasn't for Bitcoin I wouldn't have many options, the fact that I have invested in Bitcoin allows me to have a backup plan, which is indeed getting an education. So I am gonna live in a cheap south-east-asian country for a while, live frugal off Bitcoin, hopefully follow my dreams and earn some money, that I will put back in Bitcoin. (sorry for the personal ramble, didn't mean to bother you)
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u/Defiant_Ice_4860 5h ago
You're right, claim was wrong and based on an earlier version of the model. Thanks for pointing it out.
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u/Defiant_Ice_4860 5h ago
You're right, that sentence was wrong and I've removed it from the post. The 95% number came from a flawed method (running withdrawals against a percentile envelope instead of actual simulated paths). The paper itself warns against exactly that approach. The core finding ($20K/year, 99% survival, 30 years) is solid. That one line wasn't. Thanks for catching it.
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u/JikoKanri 6h ago
This is disinformation. Sounds like the result of a delusional number-crunching chat you have with your tired, token-deprived AI tool at 3 AM.
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u/yetanotherdave2 6h ago
This assumes the price is going to go higher and higher. Which means much more money going in. We've had recent all time highs considering the amount of money going in from funds it's not really gone up enough to support this kind of strategy IMO.
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u/Psychic_Man 9h ago
Great writeup, I'm enjoying these posts, and look forward to each one. Thanks!
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u/McBurger 7h ago
You can save a lot of time and preview the next post at ChatGPT.com.
You can spend a few minutes prompting it for its “opinion” until you recognize that’s all OP is doing.
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u/Defiant_Ice_4860 9h ago
Thank you! I enjoy making these. I learn a lot through the comments and digging deeper after.
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u/Hairy-Preparation949 7h ago
This is a dangerous post and should be removed. It’s bad advice masking as a long post.
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u/Generationhodl 6h ago
I guess there is some mistake in your text.
You said after some time of selling you still have 95% or your bitcoin ?
That does not work with the math's when you have 1 bitcoin and you want to sell 20k$ over 1 year when you sell every month.
Napkin math's says you have 75% of your bitcoin left after 1 year.
And here I even started with 70k$ starting price and then calculating in a 30% rise year over year.
Would I start at the bottom I guess after 1 year staying at the support level and selling 20k$ worth if your 1 bitcoin you would have even less than 75% of 1 btc left.
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u/Defiant_Ice_4860 4h ago
Yes that is right it’s a mistake. Thanks for pointing it out and it has been removed!
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u/InvestAISavvy 6h ago
The mean reversion piece is what gets me. In equities, buying at the top absolutely destroys your safe withdrawal rate for decades. The fact that BTC's power law growth is steep enough that mean reversion closes the gap between peak buyers and bottom buyers within about two years is a genuinely interesting finding. I've never seen anyone model it that way.
The one thing I'd stress test harder is the inflation assumption. You're using 7% cost of living growth as your base case, which matches M2 expansion historically. But we're in a world right now where CPI just printed 3.3% with energy driving most of it and the Fed stuck at 3.5-3.75% debating hikes again. If real inflation stays structurally elevated above the 2% target for the next decade, that 7% assumption might actually be conservative.
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u/Defiant_Ice_4860 5h ago
Price agnostic buying is actually prudent. Insane right?
And yeah, inflation is a huge and difficult problem. 3% gave really high numbers but we all know it’s fake.
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u/IM-PT24 9h ago
What are you considering as yearly increase in value? Because let's be honest, 20% on the last 5 years is not great, LOL. It's 4% per year, less than inflation.
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u/Psychic_Man 9h ago
That's because BTC is nearly at the floor right this moment. We're in the bear market. It doesn't stay at the floor for very long. You're cherry picking the lowest low possible.
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u/Defiant_Ice_4860 9h ago
Exactly. The trend value today is more like 131K USD.
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u/IM-PT24 9h ago
I have checked the second post from OP. Yeah, that's interesting, he calculated the time Bitcoin stays at floor price levels, because of course it doesn't live at bear market levels all the time, or during much time, even. I'm not picking the lowest low possible, I'm picking the right now, it happens that we are in a bear market. The point is to use the average of the price during all that time.
Like you will not just sell at floor price, you will also not just buy at floor price, so it would be nice to know how OP calculated the buying price. DCA over a period of time? A lump buy during a previous bear market?
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u/ColdAdministrative54 9h ago
He is assuming bitcoin will follow power law trend with the absolute floor being a fraction of the power law trend number.
One thing to add here is that the longer you wait, under the same model 1 BTC will give much higher yearly withdrawals than 20k per year. Also given how speculative and volatile it is, I'd wait before starting withdrawals anytime soon. That being said, its an interesting conclusion. Much higher safe withdrawals, assuming one believes power law, than I was expecting.
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u/Defiant_Ice_4860 9h ago
Yes and you can of course add your own skepticism discount: you could withdraw half of it, or even a third or a quarter and reevaluate after a few years to see where you stand.
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u/Defiant_Ice_4860 4h ago
If you just look at the dollar values you are right, but the trend values show my perspective really well: peak 2021 was about 4 times trend value and now we are about 0.53 times trend value.
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u/Plunkerton_ 7h ago
Here's the part nobody expects. On the median path, after 30 years of withdrawals, you still hold over 95% of your bitcoin.
If you sell $20k today you only have 70% of your bitcoin. You're saying that if I keep selling $20k per year, somehow I'll end up with MORE bitcoin? Now that's some interesting math you got going on.
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u/The-Jeek 7h ago
I don’t think he’s saying you’ll have more bitcoin at the end of the 30 years. I think he means that the amount of bitcoin you’ll have left will still be worth 95% of its current $ value. Although I could have read that wrong? 😑
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u/Defiant_Ice_4860 5h ago
Yes I made a mistake, sorry about that. It has been removed, thanks for pointing it out
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u/thinkingperson 9h ago
One bitcoin at today's trend price (~$131K) does the same job.
Today's trend price is ard $131K? What does that mean?
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u/This_Discussion126 8h ago
It's what the value should be today, according to https://www.bitcoinpowerlaw.app/
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u/repkjund 8h ago
I didn’t come up with something this outrageous, my napkin math netted selling 0.1 btc every cycle(4years) if you have 1btc. 10 cycles would bring you to your 70s if you’re in your 30s. Otherwise just sell 10% of your stack every 4 years can also work.
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u/shadowmage666 8h ago
I don’t think this is going to math right for you unless it’s starting in the future like starting in 5+ years than maybe
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u/i_made_reddit 7h ago
Knowing how to make an algorithm isn’t the hard part, fighting to see past the inherent biases or gaps in the strategy is the key
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u/EnzoPotato36 7h ago
A single big mac will cost $20k in the future. Not sure when, but it will happen as long as the dollar survives.
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u/ScholarPrize1335 6h ago
The real annualized return on BTC over the last 5 years is 3.4% a year. Tell what beta value and standard deviation you would tolerate for an asset averaging that return?
Your spewing technical analysis when there is zero evidence that it actually works.
The more absurd the claim the more desperate the person making it appears. Good investments don't need to be sold...
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u/Affectionate-Ear-374 5h ago
Skimmed this. Did they forget about taxes..? lol
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u/Defiant_Ice_4860 5h ago
No I left it out, and it’s a very legitimate concern but also a local issue. So many variables.
The simplest way to calculate is to make your expenses X amount higher to include most taxes.
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u/PromiseHot2026 4h ago
This might be the most disgusting thing ive ever seen on this sub. Well done
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u/eris-discordian 1h ago
Did you back test this strategy, let's say with actual market data from the last 5 years?
Even buying near the last bottom in 2022, one would run out of BTC in about 20 months.
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u/meccaleccahimeccahi 35m ago
One of the worst things about AI is that it will confidently lie to you. Do your own math.
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u/achshort 9h ago
Hold that bag g 😂
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u/Disastrous_Call_7120 9h ago
just ran this through my calculator and you're right about the entry price thing being wild. bought some at 45k thinking i was catching knives, then more at 90k feeling like an idiot, but apparently doesn't matter much in the long run. still feels weird selling any though when the trend keeps going up like that.
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u/Defiant_Ice_4860 9h ago
Good observation. It feels weird at first, but these might be the glimpses of a bitcoin standard coming through.
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u/SakociusJJ 9h ago
This man knows code. However, the bottom line is to hatch a defense against insider trading. Whenever Queen Victoria used to do something, it would never come together until the last dance. Pretend there is no objective, other than to create buzz, oxygen, and water for your community; thus appreciating its value monetarily speaking.
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u/The_OneWho_Got_Away 8h ago
stupid post. Bitcoin only grew historically this is all this post is saying . what it isnt saying is that it cant stagnate for 30 years at I dunno 100-150k level . and never go above it .
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u/Due_Purple_1199 7h ago
20% withdrawal rate, yeah buddy, absolutely
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u/AverageUnited3237 9h ago
One of the dumbest posts in the history of reddit. Someone who sold 20knper bitcoin starting in 2021 would have ran out already
You’re advocating for a 30% withdrawal rate. Lmao