Best Cryptocurrency Investment Strategies

Cryptocurrencies have made liars of critics by making money for investors over the years. They have also confounded naive true believers with dramatic retrenchments such as crypto winter. The fact remains that cryptocurrencies are here to stay. That being the case, what are the best cryptocurrency investment strategies for an investor to employ? Should you be jumping in and out as you try to time the market or follow a buy and hold on for dear life strategy? Here are a few of our thoughts about the best cryptocurrency investment strategies.

Discover the Prompt That Found My Last Breakout Trade

Successful Management of Crypto Market Ups and Downs

Although the leading cryptocurrency, Bitcoin, has relentlessly risen in price in the few years since its inception, that climb has been plagued by substantial corrections alternating with the price surges. Simply buying and holding on has tended to be more profitable than trying to time the market. But since most investors are putting money away as they are earning it that poses a problem as to whether the current time is the time to invest or the time to hold onto cash. The best remedy for this issue is called dollar cost averaging. With this approach the investor buys a set amount of Bitcoin (or whatever they are investing in) every payday, month, quarter or year. They do not attempt to time the market. By using this approach the investor buys fewer Bitcoin when prices are high and more Bitcoin when prices have fallen. Over time this approach, for most folks, beats trying to time the market and brings better results.

Take a Contrarian View to Crypto Market Extremes

Good advice for crypto investing comes from outside of the crypto realm. Warren Buffett, known as the Oracle of Omaha, retired recently as head of Berkshire Hathaway. He is a legend in the world of long term investing, primarily in stocks. He once said that an investor should fearful when the rest of the world is excited and greedy and greedy to invest when all of the market is fearful. That is to say, that when the market crashes to the bottom is the ideal time to buy and when an exuberant market is daily breaking new records is the time to be fearful of a correction. To the extent that you are not following dollar cost averaging and have cash available on the sidelines, this can be excellent advice to follow. It works in the stock market for value investors and can work in crypto when momentary panic or euphoria distort prices.

Bitcoin Wash Trading Distorts Market Pricing

There can be good money to be made in short term Bitcoin trading. Because Bitcoin does not have the kind of fundamentals that a stock does, traders use technical analysis indicators like trading volume and moving averages. A significant issue when trading Bitcoin is something called wash trading. Wash trading is when someone sells and buys a cryptocurrency or a stock (where this term originated) pretty much simultaneously. Folks try this in the stock market when they plan to take a loss on their taxes from a stock that fell in price but which they think is a good long term investment. In the Bitcoin world wash trading is a tactic meant to distort market pricing. It gives the impression of a lot more market activity that actually exists. When traders see a slight surge in price combined with higher trading volume they are typically justified in expecting a continuing upward price surge. Thus, they will buy and drive the market higher. When the initial “signal” was wash trading and therefor a false signal, traders who took the bait lose money while the instigators sell at the top of the price surge and walk away with a short term profit. The lesson here is to be careful of trading volume as a technical signal when it is the only think that might lead you to but Bitcoin at the moment and when other factors would dictate greater caution.

See the AI Prompt That Predicted a Recent Price Jump

Originally published at https://profitableinvestingtips.com on January 26, 2026.

Best Cryptocurrency Investment Strategies was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.