" Every bitcoin I sell now (without topping back up, as I would normally do for my spending bitcoins) represents a potentially massive amount of future wealth. The downside is limited to the amount I put in to begin with."
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.
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.