This is very important question but there will hardly be an answer that is ideal for everyone because people hold for different reasons. The only thing I know is that majority of people holders seems to be saving towards retirement so they can rest and enjoy their wealth when their strength is weak and they are no more in active service. A good number of people are also saving for their children and loved ones.

I am personally saving for retirement, so I can have something to fall back to them. This does not mean I will not also enjoy the wealth when I see the need to because sometime one have to enjoy the wealth to have a feeling of it at a younger age. Part of my bitcoin will also go to my children too because I intend to also make them be involved in bitcoin when they get to a certain age. Giving them bitcoin will be a very good motivation because they will be able to see that it is actually money.

We can actually say that bitcoin is a passive source of income and is recommendable for retirement program. Some says it's the end of the way to success due to its flexibility to generate wealth.
So possibly While we may sell off our bitcoin for other purposes in life, such as investmenting on other sectors, we can as well keep it up reinvesting in bitcoin even after harvesting what it has produced for us.

Real estate investments are good idea though because while we're expanciating with our investment, we should also consider management flexibility as we approaches to our retirements. So that reason why bitcoin can't go on extinction.
So I personally has taken shape and decision to a lifetime goal with my bitcoin investment.

I guess selling bitcoin in order to acquire other investment is quite unreasonable, but if you tend to sell a portion of your bitcoin investment in order to diversify your investments, that would make more sense, like buying properties or putting up a physical business that would attract a lot of customers, hence you are adding to your bitcoin investment that would also gain more passive income.

However, if you can also maximize your bitcoin investment, that would mean massive profits as well. But I always believe that it’s always better not to put all your eggs in a single basket, that way you will lessen the risk it involved and you will come to minimize the chances of getting lose all at once.

I think the passive income the OP is talking about could be investing in real estate and then renting it out to earn income each month, and bitcoin cannot do this. Additionally, there is nothing wrong if our bitcoin investment is already profitable and we take profits to diversify our portfolio. We all know that bitcoin is very volatile and it would not be wise for us to place all our assets in bitcoin.

I also have that plan, I will take profits when the bull season comes and will only keep about 30% of my assets in bitcoin, the rest I will diversify with other assets and invest in the business sector. That will help me minimize risks as well as have a daily and monthly passive income source through business and real estate rental.

I know some people view their Bitcoin investment as a retirement fund. Another reasonable idea, especially for the younger generations, is a Bitcoin college fund for kids or something like that. As for me, I'm flexible with Bitcoin: I treat BTC as a savings account, from which I take money as needed, but which I want, ideally, to grow. There's no need to go all-in on just one idea or never sell BTC. Life is unpredictable, and none of us really know how much of it we have left, so I'm a proponent of regular spending on things that make us feel better.

I can ask, How many years of life have you planned for yourself?? Judging by your post, it will take a lot of time for the events you write about to happen. But you are getting older; are there really no desires that you would like to fulfill while you are not old? My old parents no longer have good desires, although there are some means. Everything is spent on health and grandchildren. From seeing such a life, an understanding arises that the older we get, the less we want. Why save for the sake of saving? Build passive income by naturally understanding how to do it. What people write here about simple hoarding without a goal really upsets me. We must live now, travel now, and not save for old age, when nothing is needed.

The tip is to never take your feet out of the water. What I mean by this is to always keep your holdings in the crypto space no matter what happens, and even if you're planning to splurge on a large purchase.

When I was new and was not as confident as I was right now in this industry, The moment my money shot up from the 20k bitcoin ATH back in 2016 I pulled out all of my shit and made myself liquid, thinking i'm set for life with the millions that I have at that time.

I quickly realized that money when not working is easy to fade, and in a few short years I lost it all, if I had kept some of it in the crypto scene, day trading and perhaps just holding some of my coins I wouldn't have to deal with that and even now that I was able to make more money than what I once lost I still feel a little regretful that I took out all of my money in the crypto scene back then.

So yeah, just take what you really need, and nothing more. Keep your investments here.

I mean there were surely a lot of people that are just holding Bitcoin and as far as I know, don't really have any plans on selling their Bitcoin any time soon, I kinda understand and I kinda don't at the same time but we all have different situations here, for some people, of course, they might not need to sell there Bitcoin at all because there already have the money to live on their a lifetime or even more, one thing that I've heard most of the time is they were just holding Bitcoin for inheritance and they just wanted to see how the Bitcoin is going to turn out in the end, is it going to skyrocket or might see if it is going to reach 1 million dollars something like that.

Personally, I am not really a fan of that since it wouldn't really matter at all if you are not going to sell it and make a profit on it, but still it would make sense if you don't need the money, but for normal citizens for sure the main goal is to make to a profit so you would need to make the best of the cycles in the market on bear market you for sure want to accumulate, and in the bull run surely would want to sell for profit and lower your risk.

For me I would sell my crypto to buy my own land or place, then start up a small business there.
It is more of a retirement plan for me, I want to buy a land on the country side rather than live on the city.
The cost of living would be cheaper and the scenery is much nicer.
Of course I would continue to earn on crypto, and when I start my small business there I would also accept Bitcoin or other crypto currency as a payment option to promote it.