Are you sure you need the speed? Are you doing something specific where speed would be essential?
If not, the solution could be to simply copy (via SuperDuper for example) your existing setup to a large external drive, and then boot from there. Everything all in one place, just like what you're used to.
I'm doing this now over Firewire, an old outdated connection method much slower than the new connection system. Works fine for me.
Technically, booting from an external non-SSD drive will be slower than booting from an internal SSD. But in the real world where most of us live, the speed difference makes little practical distance.
As with anything else, you can never have enough horsepower (or in the modern world, enough ram).
To extend the car analogy, why would I buy a muscle car, then install a speed limiter?
The M1 Macs are up to 3 times faster than the intel Macs they replace. Internal storage is always faster than external. Even on an old iMac, booting from an internal SSD is faster than booting from a usb attached SSD. On an M1 mac that‘s even more pronounced, because CPU, GPU, RAM, are all integrated with SSD. The external USB bus will always be slower than the internal bus.
So why would I buy a super fast Mac then throttle its performance by booting from an external drive?
And yes, I need the speed. So do you. Even if you don’t realize it yet, more powerful computers will allow for apps that do things we can’t imagine yet (think AI and neural processing). The OS uses the boot drive for cacheing and memory swapping, so doing that over USB is going to slow things down even more.
But more to the immediate point I use Photoshop, which makes heavy use of swapping, and any increase in speed is desireable.
So for me the desired outcome is to have things that are performance-bound be internal, and things that aren’t, like files and settings, be external.
Frankly I am shocked Apple doesn’t just make this a selection in Migration Assistant. They’ve been selling Macs with 1, 2 and even larger boot drives for years, they should anticipate this need when they suddenly start selling Macs with drives ¼ the size.