I certainly agree with you that most traders who change their mindset and later focus on investment after series of losses, majorly because they've learnt a bitter lesson
You're right but sometimes they might also want to diversify which is by going into crypto investment, and still continue with thier trading. And of course this is how must traders do, so that should incase they experience lose in trading Maybe they can be able to recover it through thier long term investment. I have an idea about a trader who have been making use of this method, And of course as a trader is very good to diversify since we don't have a guarantee about the outcome.
You are getting the meaning of diversifying wrongly. When we talk about diversifying, it means that you want to channel the money that you are using to invest in bitcoin into another asset of different line. For instance, I have accumulated more than enough bitcoin and I feel that I am not safe enough with only my bitcoin investment, I diversify the money that I am supposed to use in buying bitcoin into investing in bonds, stocks, cash equavilents and properties for better security on my side.
Anyone trading and using his profits to invest in bitcoin is not diversifying, but doing both trading and investing at the same time. Trading is not the best way to use to increase the size of your bitcoin because you are gambling and your profits is under probability.
In other way round i think diversifying is a means of spreading your risk around, so that if some crypto assets fall in value, others can still maintain their value. I was actually trying to point out something here, you know trading has a high level of risk than that of crypto investment but is obvious that the risk in crypto investment is very low to be compared with that of trading. Which is why I just decided to use the word diversify" since there's no guarantee about those outcome we get when trading so is good to spread the risk, so that should incase you didn't succeed in trading you will still have a hope in your investment. Though your definition is quite different from my this is why is as if I'm getting it wrong here.
However, when I said that a trader should also look at crypto investment while trading. I don't mean that they should use thier profit to invest, rather they should also use a little portion of thier discretionary fund to invest, This is exactly what I was trying to say.