I was recently a guest on Blockware's podcast, and Mitch Askew kicked it off with the question every bitcoiner eventually asks:
How much bitcoin do I need to retire?
Mitch is 26 and wants to retire at 40. He expects to spend $100,000 a year, so the traditional 25x rule puts his retirement target at $2.5 million. Bitcoin was $73,525 when we recorded the episode. At that price, he would need about 34 BTC to retire immediately.
He has roughly 15 years, though. My rule of three assumes bitcoin grows at 25% a year, which works out to roughly tripling every five years. Apply that rule across three five-year periods and the target falls from 34 BTC to about 1.25 BTC.
Running that calculation gives Mitch a savings target, but it doesn't tell him what happens if bitcoin falls 50% the month after he leaves his job.
Could he cut spending? Could he earn some consulting income without returning to full-time work? Does he own other liquid investments he could sell first? If he borrowed against his bitcoin, could he add collateral or repay part of the loan?
📉 Down, not done
Bitcoin had four declines greater than 50% between 2014 and 2024. The three largest averaged roughly 80%, and three of the four took nearly three years to recover.
You can still retire on bitcoin, but you need enough room to live through those declines without dumping too much of your stack at the bottom.
Traditional retirement research calls this sequence-of-returns risk. Poor returns early in retirement do more damage because withdrawals remove assets before they have a chance to recover. CFA Institute research found that bad early returns can shorten how long retirement savings last, while flexible withdrawals and additional income improve the odds.
Bitcoin's volatility makes the effect easier to see. If the price gets cut in half, the same $100,000 withdrawal costs twice as much bitcoin. The dollars pay one year of expenses either way, but the larger sale leaves fewer sats to participate in the recovery.
Picture the drop happening immediately after you retire. Could you postpone a big trip, spend less for a year, sell stocks instead, or pick up a consulting project? You have room to wait when you've built flexibility into your approach. If your only choices are selling bitcoin at the bottom or returning to a full-time job, you retired too early.
Long-term compounding can repair a brutal opening drawdown, but first you have to get through it with enough bitcoin left.
🧱 The bunker tax
Mitch suggested keeping two years of expenses in cash or Treasury bills so he wouldn't have to sell bitcoin during a downturn. At his spending level, that means pulling $200,000 out of bitcoin, stocks, or other assets he expects to compound.
I generally wouldn't do that.
