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You're making the sunk cost fallacy. The amount you paid for an asset is irrelevant to its present value, and equally irrelevant to whether and how much of it t
by DavidSJ 14y ago
You're making the sunk cost fallacy. The amount you paid for an asset is irrelevant to its present value, and equally irrelevant to whether and how much of it to sell.
- shelf 14y ago'Sunk cost' implies an irreversible transaction. Bitcoins are highly liquid. Nothing fallacious about this logic.
- DavidSJ 14y agoIt does not imply anything about reversibility. It applies just as well to a liquid asset like bitcoin or stock as to an illiquid asset such as a house. 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.
- Jtsummers 14y agoHow is this a sunk cost fallacy? As an investment, selling off a portion locks in gains, rather than leaving it all at risk should BTC lose significant value.
- DavidSJ 14y agoSelling off a portion of your investment to protect yourself from excessive risk is perfectly rational. Doing it partially as a function of the price you originally paid is not.