The Best Strategies for Investing in Crypto in 2024

Earlier today, I was asked about my “best strategies for investing in crypto in 2024.”

It’s the same strategy as any other year. Wait for prices to drop a lot, then buy.

In 2024, you’re not getting amazing prices on Bitcoin or altcoins, but you should do okay if you stick it out. If you’re looking at a timeframe longer than 3–4 years, you’ll probably do better than stocks and bonds.

(I wouldn’t be surprised if crypto beat them this year, too, but we can’t get too far ahead of ourselves after the huge upswing in the first half of the year.)

Read on for four ideas I’ve found helpful.

1. Wait for Bitcoin’s price to drop

For an upward-trending asset like Bitcoin, you need to make sure you can buy “dips.” In other words, keep fresh cash handy.

The question is, what do you consider a dip?

If you’re tuned into crypto media, a “dip” is as little as a 2-3% drop in a day. That’s silly. Such movements are normal volatility.

If you prefer to be aggressive, wait for a drop of at least 15% from Bitcoin’s most recent highest price. Ideally, 25% or more. You may buy higher than necessary, but it’s better to get in and buy more later than hold out for lower prices that never come.

If you prefer to be conservative, wait for a bear market or the “black zone” of the plan I share with subscribers of my newsletter, Crypto is Easy. Like this:

You will get amazing value, but you may have to wait years and miss a lot of upside along the way.

Either way, you will never get your timing right. The point is to squeeze a little more juice out of the market, sidestep the peaks, and avoid giving traders what they call “exit liquidity.”

2. Buy altcoins in fixed amounts with strict limits

Many altcoins will never reach their previous all-time high. Most will die.

With altcoins, you’re speculating on experimental financial technology, social movements, reward programs, and outright scams.

Today, none are worth more than $0, but some will grow so much that you have to take a chance on buying them.

Wait for big drops in the overall altcoin market, then buy a specific, fixed amount. The drops will give you good discounts. The investment limits will prevent you from losing too much on your losers without putting a cap on how much you gain from the winners.

Those winners might deliver 2–10x by the end of the year and 10–100x or more over the coming years. Plus, you may get an altseason along the way — an opportunity to sell your losers, often for more than you paid for them.

I prefer to wait for the lines in this chart to reach the respective shaded boxes (any of them will do):

If it helps, read my Medium articles about altcoins.

3. Sell only when necessary

Selling crypto is incredibly risky. You’re giving up an asset with massive growth potential to avoid a temporary downturn.

Even taking profits is a decision you want to weigh carefully. Check these boxes before you do.

That said, sometimes the market forces you to do sell.

In 2024, that was March and the beginning of April, when we saw signs that we only see before major reversals.

Remember that “major reversals” range between 30% and 85% — but you don’t know which one you’ll get!

A 30% drop sounds bad, but the market often rebounds within a few months, then goes higher than when you sold.

On the flipside, even if you hit “the peak” exactly right, you might get screwed when you buy back your stake if Bitcoin’s price doesn’t fall far enough. With taxes, fees, and natural market volatility, you may get less crypto than you sold!

I prefer to save cash so I don’t have to time the market, but I did tell my newsletter subscribers to sell some Bitcoin in March, when its price ranged from $62–74k, and sell some altcoins at the beginning of April, right before that big drop in the chart above.

In hindsight, that looks like a good decision, but at the time, there was no reason we couldn’t have gotten one more leg up and an amazing altseason before that inevitable crash.

4. Buy more as the price goes lower

You may hear people tell you to wait for the market to trend higher and then buy as it goes up.

I’d rather wait until the market drops and buy more aggressively as the price goes lower. That way, every extra dollar brings back more value.

As a bonus, once the market turns around, I have my allocation and don’t need to worry about anything. It’s pure growth from there on out. Once everybody agrees that prices should go up, you’ve likely missed the best chance to buy.

This also gives you a good chance to beat the overall market. Quite often, the scariest times are the best times to buy. Use the Wall Street Cheat Sheet as your guide.

For example, if you ask your average person which year was the best to buy Bitcoin, 2022 or 2023, they would tell you 2023.

They’d say the smart investors held cash in 2022 and bought crypto in 2023. In 2022, LUNA collapsed, lending platforms crumbled, FTX imploded, and people lost billions. The US stock market tanked, the world economy deflated, many central banks raised rates, and China’s real estate market melted down.

Since 2023, the market has gone up.

“Only idiots bought in 2022 and held cash in 2023.”

Yet, if you bought crypto on any random day in 2022 and put cash into a money market fund in 2023, you came out ahead of everybody who bought crypto on any random day in 2023 and put cash into a money market fund in 2022.

• In 2022, bitcoin’s average price was $28,100. In 2023, bitcoin’s average price was $28,800. You got a better deal in 2022.
• In 2022, your cash got a 3% annualized return. In 2023, your cash got a 5% annualized return.

Bottom line

Don’t “buy low, sell high.” Buy low and grow.

Wait for the market to drop, then buy. When you see extreme signs that the market’s too hot, you can think about selling. Always limit your exposure to any altcoin.

These simple tips will give you an edge over the competition and boost your portfolio.

Mark Helfman publishes the Crypto is Easy newsletter. He is also the author of three books and a top Bitcoin writer on Medium and Hacker Noon. Learn more about him in his bio and connect with him on Tealfeed.