Some experts are confident that cryptocurrencies — in particular, Bitcoin (BTC) — can easily ensure a comfortable retirement for investors.
We discuss the best Bitcoin strategies that can help you retire earlier and achieve long-term financial independence.
How much BTC is needed to retire earlier
Recently, crypto analyst David Battaglia shared an investment model that calculates the amount of BTC needed to generate an annual income of $100,000. This model takes into account two key factors:
an annual inflation rate of 7%, which allows for aligning rising living costs with the declining purchasing power of the US dollar;
a conservative Bitcoin price forecast based on the 5th percentile regression — this is a mathematical model that describes price growth non-linearly, following a power law (for example, with acceleration or deceleration).
Retirement strategy with Bitcoin. Source: X/DavidBattaglia
The amount of BTC you need depends on your age and the year you plan to retire. The earlier you retire, the more coins you will need. For example, a 35-year-old person who wants to fully retire in 2030 needs to accumulate 4.41 BTC (about $460,000 at the time of writing).
«This means that by 2030, the price of Bitcoin will be high enough that 4 BTC will provide an annual income of $100,000 when invested or gradually spent,» Battaglia noted.
The expert explained that for this, the BTC price in 2030 must reach $584,112. Then, 4 BTC will provide a capital of $2.5 million with an annual withdrawal of 4% or its equivalent considering inflation.
«Key factors are inflation and the rise in the price of Bitcoin. The model adjusts the value of $100,000 considering 7% annual inflation, which means the purchasing power of this amount in 2030 will be lower than in 2025. At the same time, the price of Bitcoin is rising according to the regression model, which over time reduces the number of necessary BTC,» he added.
Battaglia proposed two ways to generate income: gradual selling of Bitcoin or transferring assets to an institution for fixed payments. The crypto analyst warned against the risks of holding funds with third parties. According to him, to increase income, one should consider moving to jurisdictions with zero tax, such as Paraguay.
«One thing is clear: we are approaching the moment when Bitcoin can provide financial independence to its holders for a lifetime. The bad news is that Bitcoin will not be enough for everyone who does not start acting in the coming years,» he noted.
In addition to Battaglia's model, an analyst under the pseudonym Hornet Hodl developed a calculator inspired by the FIRE model from traditional finance. This tool takes into account different growth scenarios (CAGR), adapted to BTC market cycles. It can be used to forecast the future value of the cryptocurrency and determine a sustainable level of annual spending.
«This is a great tool for retirement planning. Choose a model, retirement age, and amount,» wrote famous crypto investor Fred Krueger, commenting on the new calculator.
Planning retirement with Bitcoin. Source: Bitcoin FIRE Calculator
This calculator helps understand how many Bitcoins need to be accumulated for retirement and how to properly withdraw funds to last a long time. The tool averages returns over several years, making the calculations more accurate.
Five-year plan from Mark Moss
Famous financial analyst Mark Moss proposed a strategy focused on tax efficiency and asset preservation. In a YouTube video, he presented a five-year retirement plan that involves accumulating Bitcoins and using them to obtain interest-free loans. Due to the constant growth of BTC, significant profits can be made without selling the principal capital.
«The wealthy use debt for investments and to create new sources of income. Ordinary people take loans to buy things that make the rich even richer. Don't do that. We need assets that increase our wealth. And here's a life hack — this asset could be Bitcoin,» said Moss.
The expert claims that with this approach, a Bitcoin portfolio will continue to grow and provide stable passive income. According to Moss, this will allow for retirement preparation in just five years. Living expenses can be covered with borrowed funds as long as the asset price continues to increase.
«We believe that in five years, the market capitalization of Bitcoin will reach levels comparable to global assets such as gold,» he stated.
However, not everyone believes that retiring early is possible thanks to cryptocurrencies. A well-known trader under the nickname Sibel on X believes that in the crypto industry, this is almost impossible:
«You cannot 'retire' from crypto. Have you seen a single person from our field who got rich and left? Even those who tried to hide come back under new names. At some point, the thrill of trading becomes an addiction that is impossible to break,» she noted.
According to Sibel, the crypto space is an endless casino where people cannot escape the trading cycle, regardless of how much they have earned.