The Block Reward “Can I Retire Yet?” Rule of Thumb

Many of you are aware of the 6.15 meme from American Hodl. I think, and this includes myself, many plebs have this meme to thank for how hard we all collectively stacked during the previous bear market. So a big thank you to everyone on Bitcoin Twitter — as I said the other day, the peer pressure from you guys is the entire reason my net worth is about 90% Bitcoin and not 10% like I had previously planned in 2019.

However, I’ve seen a lot of newer people recently say things along the lines of “6.15 BTC is impossible to achieve now.” I’m sure at this point the meme has run its course as a truly motivating factor for many newcomers to stack. I mean, even a whole coin is now impossible for the average American to achieve (and let’s be honest, it actually is. The average American doesn’t even have $500 set aside for emergencies and almost every person under the age of 35 has a negative net worth). So if a whole coin is a discouraging target, so must 6.15, right?

I’d like to propose a slightly more serious, but related, way to think about “stack targets.” Of course, the answer to the question of “how much Bitcoin is enough?” is “False. Black bear.” But, goals are useful. I’ve seen many people say that 6.15, while they didn’t achieve it in the last bear market, pushed them to become a multi-coiner. And you know what? That’s more than good enough. Shoot for the moon, but if you fall short, you still have a nice stack from trying.

So here’s what I propose as a new heuristic: if your entire stack in cold storage is equal to the current block reward amount, you’ve stacked enough to retire during the next epoch.

Funny enough, that’s 6.25 BTC today, rather than 6.15, so American Hodl and I might be on to some nugget of truth here.

Let’s unpack this a little, because I think this could have some legs for actually being useful in the future. It also has the benefit of technically being fiat independent. I think this only works as the block reward halvings get less impactful to current supply and so doesn’t apply to previous cycles. I’m thinking more of the present epoch and forward into the future. This is meant to be a rough guide rather than an exact science and will probably only be useful for most folks while you can still buy Bitcoin for fiat. There will probably come a day when you can’t buy any meaningful amount of Bitcoin in exchange for paper. At that time, you’ll have to figure out a way to earn Bitcoin with either a great business idea or your labour. But for the present time, while we can still buy Bitcoin for fiat, this should be a useful idea to follow.

Using last cycle as a benchmark, 12.5 BTC, today, is worth about $725,000. If we use PlanB’s S2FX model as our epoch price target ($288,000) it means 12.5 BTC becomes about $3.6 million in today’s value. I think by anyone’s current measures we would all agree $3.6 million of present value is enough for two people to retire at any age.

6.25 BTC today is worth about $368,000 of present value. Certainly a vast sum of value compared to the average American’s net worth these days, but probably not enough for someone to retire on unless they had a phenomenal game plan for controlling their spending (retiring young is a gamble of sorts because you have a lot of unknowns and a lot more time for things to go wrong within).

6.25 BTC becomes about $1.8 million in present value at PlanB’s S2FX model target price of $288,000. Which, I think, is a respectable amount for a comfortable retirement. Using other rules of thumb, like 4% drawdown never depleting principal, you can live well. However, that $1.8 million is reliant on that price target. Anything less than $1 million in present value is risky for early retirement, in my opinion, unless you have a superior plan for cashflow generation. Point being, “retiring" on 6.25 BTC during this epoch could still carry risk.

However, zooming out to the next epoch, 6.25 BTC becomes about $2.9 to $3 million in present value when Bitcoin reaches a $10 trillion market cap. And because Bitcoin is designed to pump forever, your nest egg security goes up with every epoch that passes.

So that’s all well and good, but 12.5 and 6.25 BTC aren’t really attainable for the average person today. And fair enough, that’s kind of the point of this article now, isn’t it? That’s the beauty of this heuristic — it allows you to project into the future rather nicely because of Bitcoin’s halvings and epochs.

So, let’s say your stack today is about say 3.5 BTC — which is about $200,000 of present value. Next epochcs block reward is 3.125 BTC. This will be worth about $1.67 million when Bitcoin hits a $10 trillion market cap (which will likely happen during either this or the next epoch).

0.75 BTC? Not a problem, according to this idea, it will be enough to comfortably retire around 2032 (at which time the halving will have reduced the block reward from 1.56 BTC to 0.78 BTC). It’s impossible to project the price at any point in the future, especially this many epochs away. But I think this illustrates the point well.

At the end of the day, I don’t want to create a blueprint for folks — I don’t have that kind of ability or expertise — but I do want to help people set and reach for goals. This heuristic probably won’t be terribly accurate over time, but I think having a time frame and an achievable goal is important to success. This heuristic combines both.

I think for most people, the idea of being able to retire from fiat work at some point before age 65 is a rather nice thought. This heuristic will help with setting an attainable stacking goal for this epoch. If you think you can stack $10,000 worth of value per year, about $835 a month, you can use this model to project roughly when you can retire on your Bitcoin stack (the answer for $10,000 a year is about 2036–2040, which, depending on your age today, could absolutely be an early retirement).

So, to those of you who feel like you missed out on 6.15, have faith. I know you can achieve your goals, you just have to realistically set some for yourself and enact a plan to achieve them. Set a goal bassed on your current fiat cashflows within this heuristic for the next year. And if you fall a bit short, you’re still going to have more Sats tomorrow than you do today.

All you have to do is stack more Sats and you’ll be just fine.