How Long Should You Hold Bitcoin for a Passive Income

[Isay]

Topic Description:
This topic is dedicated to calculations and discussions on the strategy of holding Bitcoin to ensure long-term passive income.

Goal:
To calculate the amount of Bitcoin required so that, over time, one can start selling portions of it and receive a stable income of at least $100,000 per year for a minimum of 30 years.

Within this discussion, it is suggested to consider:

The current Bitcoin price and its projected changes.

The amount of Bitcoin needed to generate a passive income of at least $100,000 per year.

The timeframe after which it is feasible to begin selling in order to ensure income for 30 years or more.

The optimal gradual selling strategy to reduce risks and tax liabilities.

The impact of inflation and cryptocurrency market fluctuations on the holding and selling strategy.

All calculations will be based on current market data, historical trends, and realistic Bitcoin growth scenarios.

Below is a table showing, if we start with 1 Bitcoin, from which year we could begin selling parts of Bitcoin to receive $100,000 per year for 30 years:

Bitcoin Sales Dynamics and Remaining Balance (30 Years of Income)

Year      Price (USD)      Sale (BTC)      Remaining BTC
2036      960,000          0.1042          0.8958
2037      1,120,000        0.0893          0.8065
2038      1,280,000        0.0781          0.7284
2039      1,440,000        0.0694          0.6590
2040      1,920,000        0.0521          0.6069
2041      2,240,000        0.0446          0.5623
2042      2,560,000        0.0391          0.5232
2043      2,880,000        0.0347          0.4885
2044      3,840,000        0.0260          0.4625
2045      4,480,000        0.0223          0.4402
2046      5,120,000        0.0195          0.4207
2047      5,760,000        0.0174          0.4033
2048      7,680,000        0.0130          0.3903
2049      8,960,000        0.0112          0.3791
2050      10,240,000       0.0098          0.3693
2051      11,520,000       0.0087          0.3606
2052      15,360,000       0.0065          0.3541
2053      17,280,000       0.0058          0.3483
2054      19,200,000       0.0052          0.3431
2055      21,120,000       0.0047          0.3384
2056      30,720,000       0.0033          0.3351
2057      33,280,000       0.0030          0.3321
2058      35,840,000       0.0028          0.3293
2059      38,400,000       0.0026          0.3267
2060      61,440,000       0.0016          0.3251
2061      66,560,000       0.0015          0.3236
2062      71,680,000       0.0014          0.3222
2063      76,800,000       0.0013          0.3209
2064      122,880,000      0.0008          0.3201
2065      133,120,000      0.0008          0.3193
The sales are distributed in such a way that the remaining Bitcoin continues to appreciate in value, while each year’s income is ≥ $100,000, and 1 BTC is sufficient for ≥30 years of income.

If we take 0.1 BTC as an example, we would only be able to start selling Bitcoin to earn $100,000 per year starting in 2056.

Using these figures, we can roughly estimate the potential passive income for different amounts of Bitcoin and how many years we would need to wait before starting to receive a stable income.

It’s worth noting that this isn’t the easiest calculation, and getting an exact number is quite challenging. Bitcoin will remain in your portfolio over time. If we begin selling from 2036 at $100,000 per year, in roughly 10 years we could safely increase annual withdrawals to $200,000. Approximately every decade after that, it should be possible to gradually raise the amount of Bitcoin we spend in dollar terms, keeping a stable and growing passive income.

[coolcoinz]

Looks like this is just for fun because you estimate that bitcoin will be trading at almost $1m in 10 years, which would be very difficult to achieve and I'll tell you why. In the last 10 years, so from 2015 -2025 bitcoin's market cap grew from 3.5 B to 2.2 T USD. That would have to go up 10x in the next 10 years. meaning we'd need an inflow of additional 20 T USD!
To give you a perspective, when ETFs entered the scene in 2024, over the course of another ~20 months, the market cap grew by 1.2T, so we'd need to almost double that and not per 20 months, but every 12 months to reach 20T in 10 years. Where do you expect this money to come from?

Are we going to have a never ending bull season from now on with inflows rising exponentially?
What do you expect happens when we go into a bull season ending in $300k in the next 2 years? Because the way I see it we're going to have a reverse FOMO into a bear market because everybody will want to sell some.


Your math seems to count only for a constant growth over the next 10 years which isn't going to happen.

[Ambatman]

I really don't want to comment on this but you can check out this post.

JJG’s Outline of Bitcoin Investment Ideas

and realistic Bitcoin growth scenarios

There's nothing realistic about this.

In the last 10 years, so from 2015 -2025 bitcoin's market cap grew from 3.5 B to 2.2 T USD. That would have to go up 10x in the next 10 years. meaning we'd need an inflow of additional 20 T USD!  

That's not how it works. Inflow doesn't equate market Cap.
What matters is the forces of demand and supply which set the price
If the demand is higher, the price the seller would want to sell would be higher
Which will in turn also affect coins not in exchanges or being held
Hence increasing market cap.

[uchegod-21]

These are the kinds of projections newbies see online and rush to invest in bitcoin. This calculation above looks very clean and will easily excite anyone who is interested in investing their money. However, I think this post is flawed by the fact that it did not put some factors into consideration. I would want to know from op if he has tried this strategy and consistently earned $100,000 annual profits to be confident enough to recommend this to others.

These calculations above assumes that bitcoin will keep appreciating over the years. Bitcoin operates in cycles; it didn’t address the bear season and volatility. Just the op guaranteeing $100,000 annual profits. This is highly not realistic.

[TastyChillySauce00]

OP need to realize that price can't grow forever. From your bitcoin growth scenarios you expect bitcoin to go up higher and higher every year despite valuation already on the higher side.

Remember, the higher the valuation, the growth become diminished. You can't expect the price to keep going up like that. What happen if you sold portion of your BTC and as it happens there's ongoing global problem and price stagnated?
This is just unrealistic. Why don't you just hold BTC and not sell a portion of it? It's more realistic that way if you want to get the most of it.

[Free Market Capitalist]

I really don't want to comment on this but you can check out this post.

JJG’s Outline of Bitcoin Investment Ideas

I believe that the JJG thread that would be most accurate on this subject would be the following:

JJG's Bitcoin Investment Ideas (Sustainable Withdrawal / Portfolio Maintenance)

These are the kinds of projections newbies see online and rush to invest in bitcoin. This calculation above looks very clean and will easily excite anyone who is interested in investing their money. However, I think this post is flawed by the fact that it did not put some factors into consideration. I would want to know from op if he has tried this strategy and consistently earned $100,000 annual profits to be confident enough to recommend this to others.

These calculations above assumes that bitcoin will keep appreciating over the years. Bitcoin operates in cycles; it didn’t address the bear season and volatility. Just the op guaranteeing $100,000 annual profits. This is highly not realistic.

In my particular case, I'm not looking for a perfect system that works on paper, because we all know that no matter how perfect it may be, reality has its variations, and sometimes differs greatly from what's on paper. If you increase your net worth and your bitcoin over the years, you will be much better off in the future than if you didn't. When the time comes to retire, you will be able to adapt. You can withdraw $100K one year, and if there is a bear market the following year, you can adjust your spending level or draw on other assets. It doesn't have to be a pre-established plan without variations.

[OcTradism]

Bitcoin Sales Dynamics and Remaining Balance (30 Years of Income)

Year      Price (USD)      Sale (BTC)      Remaining BTC
2036      960,000          0.1042          0.8958
2037      1,120,000        0.0893          0.8065
2038      1,280,000        0.0781          0.7284
2039      1,440,000        0.0694          0.6590
2040      1,920,000        0.0521          0.6069
2041      2,240,000        0.0446          0.5623
2042      2,560,000        0.0391          0.5232
2043      2,880,000        0.0347          0.4885
2044      3,840,000        0.0260          0.4625
2045      4,480,000        0.0223          0.4402
2046      5,120,000        0.0195          0.4207
2047      5,760,000        0.0174          0.4033

I don't deny that Bitcoin has been growing in value and price over time and several market cycles but I disagree with your table above.

This table shows that in your imagination, I don't consider it as calculation as it is not based on any math, Bitcoin price will grow linearly with years. That has not happened since 2009 and it won't happen in the future.

Search and learn about Bitcoin market cycle that is four years for each cycle with bullish years and bearish years. When you learn, you will see that Bitcoin has not risen linearly with years in several market cycles so far.
https://charts.bitbo.io/yearly-candles/

[rat03gopoh]

Does that mean my Bitcoin will slowly deplete every year? Are there better offers like traditional passive income that yield benefits without reducing my initial budget (I'd tolerate a dynamic profit amount)? Because I plan to keep my Bitcoin until I take it to the grave.
Besides, judging by the price projections, we're not talking about Bitcoin. That's an outdated Ponzi scheme promises.

[traderethereum]

The illustration is easy but the reality is not like that. But your explanation is just for you. For long-term holders, they will not take $100,000 per year from Bitcoin. They will sell when their target price is reached and they know how many Bitcoins they will sell. But if that plan works for you, you can start accumulating and hodl it.

But I will not take $100,000 or even bigger per year because the tax will be bigger too. I prefer to sell some portion and that is for my expenses for a year or four years directly. But I will not withdraw all to my banks but I will hodl it in stable coins, just in case a big drop happens in the market. If that is about how long, we have our own plan so we know when we can sell Bitcoin.

[m2017]

Looks like this is just for fun because you estimate that bitcoin will be trading at almost $1m in 10 years, which would be very difficult to achieve and I'll tell you why. In the last 10 years, so from 2015 -2025 bitcoin's market cap grew from 3.5 B to 2.2 T USD. That would have to go up 10x in the next 10 years. meaning we'd need an inflow of additional 20 T USD!

What's the problem? The US government will print this money without any problems, give it to people for free (like during the pandemic), and they will invest in the bitcoin "inflating" the market.

To give you a perspective, when ETFs entered the scene in 2024, over the course of another ~20 months, the market cap grew by 1.2T, so we'd need to almost double that and not per 20 months, but every 12 months to reach 20T in 10 years. Where do you expect this money to come from?

This question becomes especially relevant in the “expectation” of the upcoming crisis, in which there will definitely not be an abundance of money.

Are we going to have a never ending bull season from now on with inflows raising exponentially?
What do you expect happens when we go into a bull season ending in $300k in the next 2 years? Because the way I see it we're going to have a reverse FOMO into a bear market because everybody will want to sell some.

The bearish trend will make adjustments to OP's calculations, since when the price of bitcoin falls at such moments, the expenses (sales) of bitcoin will increase (it will be necessary to sell more units\parts of bitcoin to obtain a profit of $100k. per year).

Your math seems to count only for a constant growth over the next 10 years which isn't going to happen.

His calculations are given under "ideal" conditions, without taking into account internal influences - the BTC-cycles and external influences, in the form of crises and the like.

[Marvell1]

Looks like this is just for fun because you estimate that bitcoin will be trading at almost $1m in 10 years, which would be very difficult to achieve and I'll tell you why. In the last 10 years, so from 2015 -2025 bitcoin's market cap grew from 3.5 B to 2.2 T USD. That would have to go up 10x in the next 10 years. meaning we'd need an inflow of additional 20 T USD!
To give you a perspective, when ETFs entered the scene in 2024, over the course of another ~20 months, the market cap grew by 1.2T, so we'd need to almost double that and not per 20 months, but every 12 months to reach 20T in 10 years. Where do you expect this money to come from?

Are we going to have a never ending bull season from now on with inflows raising exponentially?
What do you expect happens when we go into a bull season ending in $300k in the next 2 years? Because the way I see it we're going to have a reverse FOMO into a bear market because everybody will want to sell some.


Your math seems to count only for a constant growth over the next 10 years which isn't going to happen.

Not only OP, many people on the forum also set similar expectations and goals. Many believe that bitcoin will be able to reach $1 million in the next decade or surpass gold, which I have never agreed with.

No offense but it seems like a lot of people don't understand what numbers mean, and they just think that bitcoin can easily go from 0 to $100k in just 16 years. There is no reason why bitcoin can't increase x10 in the next 10 years, but they forget that market cap is what matters here. We need 21 trillion for bitcoin to reach 1 million and I want to ask them the same. Where will we get that money in 10 or 20 years?

[BitGoba]

Why would anyone sell Bitcoin at all, especially if its purchasing power keeps increasing? Bitcoin is money with a hard monetary policy. It’s better to focus on your work, earn as much as possible, and save every surplus in Bitcoin until the moment you want to spend it on goods or services you desire. Fiat currencies are very unstable and risky they can collapse or suffer hyperinflation at any time and constantly lose value due to daily inflation. It’s smarter to hold Bitcoin, which is much more stable, and spend it only when needed.

[Isay]

Looks like this is just for fun because you estimate that bitcoin will be trading at almost $1m in 10 years, which would be very difficult to achieve and I'll tell you why. In the last 10 years, so from 2015 -2025 bitcoin's market cap grew from 3.5 B to 2.2 T USD. That would have to go up 10x in the next 10 years. meaning we'd need an inflow of additional 20 T USD!
To give you a perspective, when ETFs entered the scene in 2024, over the course of another ~20 months, the market cap grew by 1.2T, so we'd need to almost double that and not per 20 months, but every 12 months to reach 20T in 10 years. Where do you expect this money to come from?

Are we going to have a never ending bull season from now on with inflows raising exponentially?
What do you expect happens when we go into a bull season ending in $300k in the next 2 years? Because the way I see it we're going to have a reverse FOMO into a bear market because everybody will want to sell some.


Your math seems to count only for a constant growth over the next 10 years which isn't going to happen.

But why do you think that this will never happen and we achieved growth only because of the ETF? Perhaps the ETF helped the growth, there is always something that helps growth, and a very important point is the moral growth of the price, few people believed five years ago that bitcoin could reach 100,000, but it reached this mark and fixed itself at it, with 1 million it will also be very difficult, there are a lot of calculations where bitcoin reaches 1 million much earlier than 2036, but I do not believe in them because this is the same moral growth mark and it will also be very difficult to reach, but bitcoin will reach it or cease to exist, just think for yourself how bitcoin will work without constant growth, bitcoin cannot exist without mining and mining cannot exist without constant growth of bitcoin.

[pooya87]

That's not solid planning though, specially in bitcoin market where it has been proven already that it can have long bear markets where price keeps going down instead of going up. Then you end up selling a bigger percentage of what you have to get the same fiat value out. I'm talking about a period like 2018 for example.

I would also not call it "passive income", that is more like slow liquidation of your investment. A passive income shouldn't involve your initial capital melting away but instead you should still be able to keep the 1BTC and still earn the annual $100k.
Assuming $1 mil price, that makes it a 10% profit which is possible without having to touch the capital.

[davis196]

Those are some pretty weird speculative numbers you are sharing with us, OP. The BTC price hitting 130 million USD per BTC after 40 years? Can you imagine BTC having a market cap, that is bigger than the global GDP. This doesn't make any sense. This is impossible, even if Bitcoin becomes the one and only global currency(which would never happen).
Or perhaps you are predicting a horrible USD hyperinflation, which would cause all asset prices to go thru the roof. This is possible.
Yes, BTC can't exist without mining, but I do believe that BTC mining can exist without a growing BTC price.
I also don't believe in this "passive income" thing. This "passive income out of BTC" plan would disappear when a price crash and a bear market occur and we all know that the BTC price can't go up forever.

[Marvelockg]

Goal:
To calculate the amount of Bitcoin required so that, over time, one can start selling portions of it and receive a stable income of at least $100,000 per year for a minimum of 30 years.

Even though investing in bitcoin for the long term tend to suggest that you are holding your bitcoin for a time of say eight to ten years or above, expecting to get your returns in 30 years time is something we can not be too sure of regarding what the price of bitcoin will be at that time. How long should one hold bitcoin? two circles is not bad for a start after which you can set another goal and then see how things goes. there is nothing like an 100% certainty that bitcoin will continue to get bullish and bullish and bullish for the longest possible time. it is not an ideal asset and so, while making your plan, you have to factor in the fact that bitcoin is still a volatile asset that can get bullish for a time and still get bearish for a certain period of time.

[Apocollapse]

The profit we got from selling Bitcoin is a capital gain, not passive income.

If you have to make analysis, making a plan when to buy, sell and re-buy Bitcoin, you're a trader which spent time for making money, not just sitting on your bed and you're still earn.

If you only rely on Bitcoin to fund your life, sooner or later you will lost all of your coins.

I consider staking is a passive income, if you invest in stock, dividend is the passive income.

[hd49728]

The profit we got from selling Bitcoin is a capital gain, not passive income.

If you consider profit from investment is part of your income, Bitcoin can bring passive income. It is a term and can be used depexently on each person's view. I don't think it is too important to have an agreement on which term is correct, which term is inaccurate.

I consider Bitcoin profit as my income and it does not mean I don't have to work. Buying, holding and securing my wallets and wallet backups are sort of works so it passive income for me.

With government, they surely consider it as capital gain as they enforce Capital Gain Tax on us.

[john_egbert]

The profit we got from selling Bitcoin is a capital gain, not passive income.

If you have to make analysis, making a plan when to buy, sell and re-buy Bitcoin, you're a trader which spent time for making money, not just sitting on your bed and you're still earn.

If you only rely on Bitcoin to fund your life, sooner or later you will lost all of your coins.

I consider staking is a passive income, if you invest in stock, dividend is the passive income.

That's why we need to find a good, stable source of income to sustain our BTC accumulation

Without it, there would be no good results by the end of it if we start today, not years before.

[lionheart78]

There is no passive income in Bitcoin holding.  Bitcoin does not stake unless the holder join a staking program offered by a third-party entity, so don't mistake Bitcoin for those altcoins that have a PoS feature.

The price calculation looks good and very enticing, reminds me of a Ponzi scheme profit calculator.  Bitcoin is not a single line uptrend.  The Bitcoin market is a roller coaster where it surges and dips with its own time of pace.

The profit we got from selling Bitcoin is a capital gain, not passive income.

If you consider profit from investment is part of your income, Bitcoin can bring passive income. It is a term and can be used depexently on each person's view. I don't think it is too important to have an agreement on which term is correct, which term is inaccurate.

If you sell your holdings, that is not passive income, and Bitcoin profit is realized when it is sold.  I also believe that there is a need to know the right term to differentiate between two different things.  Otherwise, people will be confused.