JJG Sustainable Bitcoin Withdrawal Strategy

Ideas of sustainable withdrawal that calculates monthly budget limits based BTC spot price relative to the 200-Week Moving Average (200-WMA). Reference

Price Above 200-WMA(%)
Date
 
BTC Spot Price
 
BTC Stash Value (Spot)
 
200-week MA
 
BTC Stash Value (200-WMA)
 
Day's Range
 
 
200-Week's Range
 
 

Input Area

Conservative

4%

Bitcoin Price / 200 WMA Chart

1M 6M 1Y 5Y 10Y ALL

Price data from coingecko

Output Area

Monthly Authorized Withdrawal  

Advanced Withdrawal  

(optional - yet recommend) Details below

Simulation

You can simulate what your portfolio would be like if you had already started this strategy.

Considering you withdrawal at fixed dates 8th and 22nd each month.

How to use the information provided through this tool:

Underlying presumptions:

This tool is meant to help a person/institution/government to manage his bitcoin holdings and to employ sustainable BTC withdrawal methods.

This is not considered as a BTC trading tool, even though it presumes abilities to withdraw higher levels of BTC withdrawal based on BTC's spot price (including authorizations to withdraw more than one bitcoin in advance, as long as the BTC spot price is over certain price thresholds.

How the calculator works:

BTC stash size: Of course, this inputted data could be the total of your BTC stash or it could be a part of your BTC stash that is set into such a separate budget. This also could be part or all of a budget of an institution, government or some organization that might be authorized to spend within such limits. I had personally been considering it as a way to set aside funds to fund developers. So, for example, a starting amount might be 21 BTC for a developer fund and 21 BTC in order to pay for expenses to administer such fund.

Annual Withdrawal rate: Of course, for the authorized monthly withdrawal, this inputted rate ends up getting divided by 12, but at the same time, since we are using the 200-week moving average (which mostly tends to be a bottom price) to valuate the size of our BTC stash, a sustainable withdrawal rate ends up higher than traditional assets that tend to recommend withdrawal rates of 4% or less. Accordingly:

  1. A. 0% to 5%: considered as growth-oriented withdrawal rates, and your BTC holdings (budget) will likely continue to grow in value if you use such withdrawal rates
  2. B. 6 to 10% presumptively sustainable withdrawal rates, and each person using such tool would need to decide for himself how conservative or aggressive to be regarding the employment of such withdrawal rates
  3. C. 11% to 16% - not as likely to be sustainable
  4. D. 17% and higher - likely to deplete the fund, and of course, lower rates are likely to sustain the fund longer than higher rates

(Authorized) Month Withdrawal limit (BTC): This output is calculated based on:

Month Withdrawal limit = BTC stash size * Annual withdrawal / 12.

When the BTC spot price is at least 25% above the 200-week moving average, then at least 1 month's withdrawal will be authorized; however,

  1. A) if the BTC spot price is between 10% and 25% above the 200-week moving average, then you will be authorized to withdraw for only 90% of the current month's limit.
  2. B. if the BTC spot price is between 0% and 10% above the 200-week moving average, then you will be authorized to withdraw for only 85% of the current month's limit.
  3. C. if the BTC spot price is between 0% and 20% below the 200-week moving average, then you will be authorized to withdraw for only 70% of the current month's limit.
  4. D. if the BTC spot price is between 20% and 30% below the 200-week moving average, then you will be authorized to withdraw for only 50% of the current month's limit.
  5. E. if the BTC spot price is greater than 30% and 35% below the 200-week moving average, then you will be authorized to withdraw for only 40% of the current month's limit.
  6. F. if the BTC spot price is greater than 35% below the 200-week moving average, then you will be not be authorized to withdraw any BTC from the budget.

(Authorized) Month Withdrawal limit (USD): This output is calculated based on BTC stash size * Annual withdrawal / 12 (* USD Spot price). Since the BTC spot price is continuing to change, if the monthly withdrawal is not accomplished all at one time, it is best to refer to the BTC authorized monthly withdrawal amount to stay within limits.

Advanced Withdrawal (No. Months): This output is calculated based on if the BTC spot price is higher than the 200 WMA. Accordingly:

  1. A. if the BTC spot price is between 33% and 66% above the 200-week moving average, then you will be authorized to withdraw for the current month + an additional month.
  2. B. if the BTC spot price is between 66% and 100% above the 200-week moving average, then you will be authorized to withdraw for the current month + 3 additional months.
  3. C. if the BTC spot price is between 100% and 200% above the 200-week moving average, then you will be authorized to withdraw for the current month + 5 additional months.
  4. D. if the BTC spot price is between 200% and 400% above the 200-week moving average, then you will be authorized to withdraw for the current month + 11 additional months.
  5. E. if the BTC spot price is between 400% and 650% above the 200-week moving average, then you will be authorized to withdraw for the current month + 23 additional months.
  6. F. if the BTC spot price is between 650% and 900% above the 200-week moving average, then you will be authorized to withdraw for the current month + 35 additional months.
  7. G. if the BTC spot price is between 900% and 1,400% above the 200-week moving average, then you will be authorized to withdraw for the current month + 47 additional months.
  8. H. if the BTC spot price is greater than 1,400% above the 200-week moving average, then you will be authorized to withdraw for the current month + 59 additional months.