My idea is to use the volatility to my advantage. I do not concern myself with the actual price, just how it changes. Many small gains add up due to the compounding interest effect.

For example if I buy 0.5 bitcoins for $500 to start, I wait for a positive price change. Let's say it goes from $1000/BTC to $1015/BTC. I sell 0.1 of my bitcoins and I have 0.4 left. Any price change under $1015 is a winning buyback for 0.1 BTC or less, since that's the amount I sold. Any price change still landing over $1000 is a winning sell for 0.4 BTC, since that's what I have left. Any drop under $1000 is a good buy.

Making many small trades like this over time will beat any "buy low, sell high" single clump trade.

It's just the fees kill you at 1% each. You'd need at least a 2% price swing on every trade, so a $1000 buy needs a $1020 price for s sell, and $1020 needs to drop to $1000 before a rebuy is triggered.