There is nothing new for me in this thread. For a long time I've been advocating about following some basic personal finance principles before you buy bitcoin and one of them is having a so-called emergency fund or backup fund as the OP says if you prefer. What I don't agree with is to grow it as well. Once you have your emergency fund fully funded you should stop adding to it. You don't need more, it's fiat and gets devalued, so you should only grow your investments.

I believe you always have to keep some backup funds for emergencies... In any case, I would still "save" in bitcoin, consider it like a savings account

Without having patience to hodl for a long term you won't make it that big and sometimes you will end up losing money but if you are patient enough to hodl for long term then you will definitely reap big.
And without a Backup funds you will easily be tempted to dip hands into your Bitcoin investment when ever you have emergency or problem and you are not with cash but when you have a backup funds it will help you in times of emergency or problem.

So it is very important to protect your investment, especially investments as volatile as Bitcoin, to avoid unnecessary losses. So it will be a very good move to build your backup funds, while contemporaneously building your Bitcoin, although it may slow down your accumulation speed and may take a bit longer to reach your financial goals, however it's all good as long as your backup funds are being built gradually and strong, because the backup funds are just as important as the investment itself. However, it's more preferable engaging in a slow but steady accumulation with a strong financial backup, than being aggressive with one's accumulation with no strong financial backup which will later lead to one's down fall.

Don't you think the problem is that you invested most of your money into a long term asset, if you do it this way, you'd frequently be forced to sell when you do not want to, that's why i have said in this thread already, that i recommend keeping part of your funds in liquid assets that you can easily convert to cash.

Take note as well that BTC isn't the only thing you can invest in for the long term, there are other assets you can diversify into. Finally, even if fiat is inflationary, you should also have some money in your bank account for quick spending.

Have you ever thought about the scenario where the market suddenly falls into bear season? Bitcoin suffered a serious dump, losing more than 70% of its value like the 2022 bear season and your exchange accidentally went bankrupt as FTX did. What would you do if all your assets and savings were in bitcoin? Is that strategy still great?

Fiat has inflation, but in the short term it will not fluctuate and lose value like every time bitcoin corrects, so don't be too stubborn about the concept of inflation and ignore the importance of fiat in the short term. Always having savings in fiat currency will help you a lot in emergencies.

Without having patience to hodl for a long term you won't make it that big and sometimes you will end up losing money but if you are patient enough to hodl for long term then you will definitely reap big.
And without a Backup funds you will easily be tempted to dip hands into your Bitcoin investment when ever you have emergency or problem and you are not with cash but when you have a backup funds it will help you in times of emergency or problem.

If you want to make an investment in bitcoin, there are things in which you need to consider first before anything, the kind of investment you're going into, its duration, the source of fund to use for the investment and so on, if you can't afford to use money from what you have earned or the fund that belongs to you, then you don't have to force yourself in making an investment, money for your daily expenses shouldn't be included as part of your investment.

The logic behind this is wrong, because nearly all of your money shouldn't be in BTC, for the rest of it to be called a 'backup' fund. There are other investments and assets you can purchase, gold, real estate, and many more you can find; your funds should be well diversified into different assets like these, alongside BTC. However, like you said, it is important to always have liquid asset, so you can live and solve necessary problems without liquidating your long term assets.