Big Sur 11.4 Supports Full External Booting for Apple Silicon Macs »

Howard Oakley at The Eclectic Light Company:

I’m delighted to report that five months after I wrote that M1 Macs had problems starting up from external disks, Apple has finally fixed Big Sur 11.4 so that they now work fully.

If you have an M1 Mac, you should now be able to connect supported storage, such as an SSD, install on it any version of Big Sur from 11.2 onwards, select that in the Startup Disk pane, and boot your Mac from that external disk.