How much Bitcoin should you own? Think in terms of "short", "medium", and "long" money

How much Bitcoin should you own?

View cash, stocks, and Bitcoin as "short", "medium", and "long" money. "Short money" covers living expenses, emergencies, and near-term goals. It must be safe, predictable, and accessible. But inflation makes it a melting ice cube (officially 2-3%, but 7%+ in reality), so minimize it.

"Medium money" is for 1-5 year needs. Stocks are volatile, but a diversified portfolio has a 95% chance of positive returns over 5 years. Bitcoin has never declined over a 4-year period, so you should not need more than 5 years of medium money.

"Long money" is your nest egg - for retirement and future-building. Bitcoin currently offers the best risk/reward ratio of any asset until its true value is priced in. It's also "default money" - the default store for wealth. Until Bitcoin becomes global reserve currency, better yields are unlikely. The S&P 500's historical average return is about 10% annually, while Bitcoin has averaged over 160% annual returns since 2013. Bitcoin isn't the only long-money bet out there -- but I can't think of anything there. All mainstream investments have been diluted by inflation and return much less than their nominal rate.

If you were looking for percentages, I'm sorry to disappoint you -- everyone's financial situation is different. If you don't have an emergency fund, you shouldn't own any Bitcoin. If all your assets are tied up in your passion project business venture, perhaps Bitcoin isn't for you. But if you're sitting on purposeless cash, consider dollar-cost averaging (DCA) into Bitcoin. A common DCA strategy is to invest a fixed amount weekly or monthly, regardless of price.

The key is balancing immediate needs, medium-term goals, and long-term wealth building based on your specific circumstances.