If he were a real friend, he wouldn't be putting you in this situation.
Were you interested in selling it before he asked? No? Then it's not for sale.
I could not say it better. You can figure out what you want to do.
I have an aquantance that I would like to buy a gun from. I have made that clear.
He wants some lessons in the breakdown of the bolt.
As soon as we can get together he will get that instruction, and it has nothing to do with if he sells me the gun.
I made my desire clear, he knows it, we leave it at that.
Sometimes friend do things that put us in a bind.
I had a forum friend in Australia that wanted me to send him some software. I hated to do it, but I told him it was on the proscribed list, I was not going to break the law doing it.
So, the first thing you tell your friend is, I don't want to sell it.
If he persists, then its, ok, I will sell it to you (put conditions on it if you want) - it has gone up in value, this is what I will sell it for.
I have brought some guns from my brother, he gets to set the value, not what he paid for them, but what he thinks they are worth. I either buy or do not. And while he has totally opposite political views, he is a good brother, a good citizen and a fine person. He has offered at one price and then raised it. I am ok with that, I can reject or accept.
You can sell it back, buy another one and move on. It sounds like that is where you are leaning.
We can give you ideas, but its your decisions.