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The key part of what you wrote is “IF you hold 2-3 years of expenses in cash”.
That is, in and of itself, diversification to minimize SORR. And yes, this is especially important at the time of retirement.
The best way to plan one’s portfolio is to stress test it for randomized returns given bounded volatility assumptions (using a Gaussian box-muller transform).
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The SORR analysis is correct but I think it understates how bitcoin specifically changes the retirement math.
Traditional SORR models assume you're withdrawing from a portfolio that can go to zero or stay depressed for years. Bitcoin has a historically reliable 4-year cycle tied to halvings — if you plan withdrawals around cycle timing rather than calendar years, you can largely sidestep the sequence risk. Nobody forces you to sell in a bear year if you hold 2-3 years of expenses in cash or stablecoins as a buffer.
The "don't put all eggs in one basket" advice assumes all baskets have comparable risk profiles. But if your other baskets are bonds yielding below real inflation or equities correlated to money printing, your diversification might be adding correlation risk rather than reducing it.
That said, the core point stands for people who are actually at retirement age today. If you're withdrawing now, a 50% drawdown with no buffer is devastating regardless of your thesis. The solution isn't necessarily diversification — it's having a withdrawal strategy that accounts for volatility. A 2-year cash runway plus bitcoin beats a 60/40 portfolio in most backtest scenarios since 2013.