Finance does not have to be intimidating. We all started somewhere with someone. That may have taken longer for some others, but we are here because of someone's kindness and wisdom. Wherever you are on your journey, we wish you the best.
This can be a subject matter of much contention and debate about which one is greater. Others can play in that dirt. Rather what I offer here is a general definition: traders tend to have a shorter-term view of the market and therefore strategies and areas of focus and conversation will be those that are applicable within that time period. While Investors favor a longer-term view. They are not exclusive to each other rather it is only a classification of a time horizon and one’s process to engage.
Investment Advisors are usually Fiduciaries which gives them an obligation to manage money according to their clients’ best interests. The same way hedge funds would operate according to their operating agreement, Investment advisors for individuals would align their investment strategy with their client’s suitability profile.
You may see many charts and graphs in the world of Finance but may notice some individuals have a greater focus on trend lines like Moving Averages, and Bollinger Bands and Fibonacci’s. This type of analysis is technical analysis and examines the movement of a stock or assets price. This type of analysis leans more toward the short-term, trader end of the investment spectrum.
Then there are also those whose items of scrutiny include; Cashflow, Growth, Leadership etc. This type of analysis is called Fundamental Analysis, think “Finance is Fundamental” as a memory aid. This type of analysis leans more toward the long-term, investor side of the investment spectrum.
Both have their own pro's and cons, which we can explore further. However the goal here is to give context as to why one investor may favor one type of analysis over the other. this may be best summed in the following quote, "The market is a popularity contest in the short run, but a weighing machine in the long run.".
Let's keep it simple, Traditional assets are the following: Stocks, Bonds and Cash. Which leaves virtually everything else as an alternative.
Distinctions in asset classes may also affect your tax accounting as well as regulatory bodies overseeing transactions. As of 2024 Bitcoin is classified as real property and is taxed as such. Additionally, the Securities and Exchange Commission regulates bitcoin ETF's while Hash rate for miners are treated as a commodity.
Ultimately you should seek to get your own personalized advice to meet your goals and expectations.
Philosophies of how to hold Bitcoin and other Digital Assets can vary but should ultimately align with your needs and investment time horizon. Each has its own pro and con and there are plenty of options to fit your needs.
At its basis the self-custody route satisfies the need for direct control over the asset. The Phrase " Not your Key's not your Crypto.", best reflects this sentiment. Custody solutions include multi key third party confirmation as a service for businesses and family offices. However, the added security to this type of custody but its nature becomes less liquid.
Most recently ETF's and other derivatives have come forth to add additional ways for investors to get access into Bitcoin without the additional needed attention of storage and security. This broadening of the market participants of Bitcoin as a store of value adds to the likely hood of mass adoption but does not yet solidify it.