I hope people are selling something at these price levels. BTC may continue to run or may crash really hard soon, but at least make sure that if the crash comes you end up ahead.
If bitcoin crashes to nearly nothing, I will be sad that such a brilliant experiment has failed. I'll also be bummed that my money is gone, but I won't be destitute and it won't make my life worse off.
Lets say you purchased 10 BTC at 40 bucks. Losing 400 won't break the bank. Now it crossed 120. If you sold 4 BTC you'd still have 6 BTC and make 80 bucks in the process. The $80 isn't as important as the fact that you've already effectively reduced the cost basis of the 6 BTC to zero, in which case you literally could just sit there and wait. If the price did crash to zero, you would still be net ahead.
Two people each have 1 BTC. One paid $5 for it, the other paid $10 for it. Their present situations are identical, therefore the rational behavior is the same for both of them, despite their different purchase prices.
You can elect (at least in the US) to use average basis (which is what you are talking about), FIFO (IIRC LIFO is not permitted), maximum capital gains or minimum capital gains. You can elect to minimize capital gains this year, but that comes at the expense of reducing the tax basis of the residual to 0
Also, people hate to lose money. i.e. the difference between losing 1 dollar and breaking even is not large in fact, but is really large in mind. Even people who recognize this is irrational still suffer if feel they have lost money - so, removing this suffering is valuable to them.
If you only have 10 btc, selling one to break even lifetime will permanently mean you did not lose money. If btc go to a million each, an extra million will not make much difference, since utility of money at the top is much less than at the bottom.
Therefore I think it makes perfect sense for humans who bought btc cheaply to sell fractions of their total holdings to remove the possibility of losing money on btc overall.
Unless you have technical advice you'd be interested in sharing about where the price might head?
It's generic advice that applies to everything that's possibly in a bubble (like penny stock pumping). By sacrificing some of the potential upside, you allow yourself the ability to weather any potential drop (even if became worthless in the near future).
' "Those holding Bitcoins currently should get out, but other people should get in".'
I neither think that those holding BTC should entirely get out (hence "something" and not "everything") nor do I think others should get in. I'm not a timer and, especially given the fact that its $141 right now, I think it's a fool's game to pick the top and the bottom (so it makes sense to sell a little as the price runs)
People seem to love talking about shorting Bitcoin, and a crash wouldn't surprise me all, but given Bitcoin's meteoric rise recently you'd have to be insane to actually do it.
(https://news.ycombinator.com/item?id=5421675 11 days ago, when the price was about $70)
Now consider how much more liquid BTC is.
The problem is that there is no supported mechanism for shorting.
If you have a lot faith in bitcoin, will you lend me some at 0% (or negative, if you believe in growth!) annual interest for a 10 year term? If so, I will take that loan.
Just 15 days ago, it was trading at $50.00: https://news.ycombinator.com/item?id=5398042