Holding on to Fiat when holding means you know what you are doing. Sometimes the market could go sideways and the price of coins could come down drastically. That will be a very good opportunity to buy some coins with your Fiat.
Its called arbitrage trading. When bitcoin goes up mooning, you can sell them for USDT and then hold the USDT for the bear market. Then you cna use that same USDT to buy a biggest amount of bitcoin. This cycle can be continued and the result is the gradual increase in the stock of bitcoin or USDT whichever you want. One volatile currency's volatility used to increase the assets against a stablecoin.
I think you are correct. However, not everyone can trade, and many people end up actually losing coins rather than making profits. So, you have to decide if this is for you or not.
You have no idea what you are talking about. Hodling fiat is important in case the market goes opposite the direction of which you are predicting it to go.
Crypto need to hold to earn huge profit. If you hold fiat you can't increase your money for the time passed, we need to seperate our own fiat money with our digital money.