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I don't think that a trader will be able to outsmart a bitcoin investor in the long run who is only buying and hodli. The reason why I said so is that traders like to take unnecessary risk and they don't think about the outcome of such decisions. You will see that if a trader is making little profits, he will not be pleased with it, because he wants to get rich quick and he can increase his trading amount or if possible trade will all his profits at once believing that he will be profitable but most times it turns out the opposite.
Based on what you said above JJG about someone who has $100 and should put $10 into trading/shitcoins.
I believe that in a circle, that person might not be able to still have that $1040 in his trading account again, it will be lower, or he has lost it all because I don't think that he can be on a regular profit unlike his bitcoin investment that he is not touching but increasing in value as bitcoin price increases. Imagine when you put $10 in your trading account, that person might want to trade immediately without patience and I believe that before he will add the next $10 to make it $20, he might have lost the first, or when making profit, along the line, he will not be able to discipline himself and lose all his trading portfolio.Investing is easy and the best compared to trading because it's stress free and for future purpose, but with all the stress in trading and emotional trauma when bitcoin price dips, can make you unstable and make wrong decisions that will cost you to run at big loss. I know that no invest is guaranteed in future for profits, but I hate involving myself in actions that the chance of losing is higher than making profits. A lot of traders became mute when bitcoin reached $100k, due to regrets because they knew what they have missed for gambling with their bitcoin that they bought at lower price. This is how majority of traders will keep on regreting in their lives now and in future.
I doubt that we can know for sure in advance whether the trader will be able to maintain his portfolio and/or to gain in value in such a way that outperforms his bitcoin holdings after two years, yet he can monitor how he is able to do with the passage of time. We know that bitcoin has UP and DOWN periods too, so someone who might start this process when bitcoin is at the top of the period may well be able to outperform bitcoin in the short term, yet one of the problems investing in shitcoins is that they tend to be correlated to bitcoin, so investing into one or two shitcoins may well result in the shitcoins performing directionally similar to bitcoin, yet the trader would be trying to catch one or two shitcoins that have short periods of outperforming bitcoin and to get in and out of such shitcoin in order to not get stuck in a period that the shitcoin is underperforming bitcoin.
It will not be easy to outperforming bitcoin consistently especially over a couple of years or more, but it would not necessarily be impossible with some kind of luck or skill. Even a trader cannot necessarily know if his performance is due to luck or skill, yet the longer his track record and if he is able to out perform bitcoin over a couple of cycles, then there might be signs of good skills that might turn into bad luck since there can be a lot of skills but then unexpected things happen, and surely any trader is going to want good luck rather than bad luck when the unexpected things end up happening from time to time.
You’re right. It may be considered to be pretty challenging to attempt predicting a trader’s performance, particularly when it involves having to outperform Bitcoin. Bitcoin’s consistent price fluctuations, as well as the correlated nature of several shitcoins could be considered as part of the reasons why it’s pretty tough to consistently beat Bitcoin’s performance.
We could say that it’s like attempting to catch lightning in a bottle. Even if you manage to be lucky enough to actually find a shitcoin that could outperform Bitcoin temporarily, it may not actually end there because the ability to sustain that performance overtime becomes a totally different story.
Most of the times, even experienced traders with the trading skills may actually find it pretty difficult to differentiate between skill and luck, and there’s every possibility that a quick turn of event could immediately turn a good win into a huge bad loss. But just like you rightly said, genuine skill could be indicated or confirmed when there’s a lengthy track record of outperforming Bitcoin, not once, not twice but multiple times in different cycles.
Finally, I’d say that trading is full of complexity and unpredictability, there’s not a single guarantee of actual success, but for those who can’t resist the temptation and are actually willing to take the risk, they should be super careful and always remember to use not more than 10% of their holdings in order to be on the safest side.