What is the Problem with HODLing?
There are a number of problems with HOLDing, however the primary issue is that it is massively inefficient, being that although over a long enough period of time most investments in the crypto space become profitable, throughout that period they could have been a lot more profit generated by actively trading.
You got it all wrong, and this is the part where it's the most visible! "throughout that period they could have been a lot more profit generated by actively trading." it's like you are saying "hey people try to gamble with your valuable assets, you can make more in the casino for one night than you can make by holding you valuable asset for +10 years! Well it's not like that, with trading/gambling you risk what you have, and there're chances for you to make more, but, but... you can try, like many others that have tried, and we all know that just rare are truly successful!
"however the primary issue is that it is massively inefficient" say that to people who bought bitcoin under a dollar (or ethereum, or some of many other coins) and they kept their coins safe until now!
This is the issue, yes you can earn a lot of money with trading but at what risk, well the thing is that we know the risk, we know that in most markets 90% of the traders are losers and the majority lose all their capital, so by virtue of just being a holder you are already beating 90% of the traders as well, if we suppose that the average loss of those people is half their capital then this means the other 10% of traders should take those profits for themselves and average 450% on profits during that same time frame, can a trader obtain those kind of profits? If the answer is no then there is no point to trade and it is better to hold.