The cryptocurrency market has had a whirlwind of a year so far. After several major cryptocurrencies reached record highs over the last few months, many of them are now seeing their prices plummet.

In some cases, buying the dip -- or investing when prices are at their lowest -- can be a smart investing strategy. You have the opportunity to stock up on solid investments at a discount, then reap the rewards once prices bounce back.

However, investing in cryptocurrency is not quite the same as buying stocks. While stocks have a long track record of increasing in value over time, cryptocurrency is relatively new to the scene and nobody knows what its future holds.

If you're on the fence about cryptocurrency, should you buy now when prices are lower? Or wait to see whether the crypto market recovers? Here's what you need to know.

Bitcoin token with stock market chart behind it.

Image source: Getty Images.

Consider your investing strategy

Whether you choose to invest in cryptocurrency right now will depend on how long you plan to hold your investments.

One of the best ways to build wealth is to buy solid investments and hold them for the long term. While it's possible to make money with short-term investing strategies, such as day trading, those techniques can be incredibly risky.

By investing for the long term, it doesn't necessarily matter when you buy. If your investments are strong, they should grow substantially over time. So whether or not you buy when prices are at their lowest won't make much of a difference over the long run.

Of course, nobody knows for sure what the future looks like for cryptocurrency or whether it will still be around in the long term. But if you believe in its potential, it doesn't necessarily matter whether you buy right now or when prices are higher -- if cryptocurrency succeeds and prices increase over time, you'll make a profit regardless.

Will cryptocurrency succeed in the long run?

The truth is that nobody knows where cryptocurrency will be in five, 10, or 20 years. Some experts predict Bitcoin (CRYPTO:BTC) will eventually reach $500,000 per token, while others don't believe cryptocurrency has any potential at all.

Investing in cryptocurrency is a personal decision, and it will depend on your tolerance for risk. Cryptocurrency is still relatively new, so investing now is risky. However, if it does succeed, you could potentially make a lot of money by getting in on the ground floor, so to speak. If you're a risk-averse investor, you may decide to wait a few years to see how crypto continues to perform. This may limit your potential earnings if prices increase dramatically in that time, but it can also reduce the risk of investing.

If you do choose to invest, think carefully about which cryptocurrency you buy. Not all currencies are created equal, and some are higher risk than others.

Two of the biggest names in crypto are Bitcoin and Ethereum (CRYPTO:ETH). They have the longest track records and the most real-world utility at the moment, which gives them advantages in the crypto space. Meme coins like Dogecoin (CRYPTO:DOGE), on the other hand, are incredibly risky and less likely to succeed over time.

All cryptocurrencies are high-risk investments, but by doing your research and choosing your investments wisely, you can limit your risk as much as possible. Cryptocurrency may or may not succeed over the long run, but holding your investments for as long as possible will make more of a difference than when you choose to buy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.