Buying the dip can generate compelling returns. However, in practice, pulling this off effectively may be easier said than done.

One way to weather a crash in digital currencies is to Hold On For Dear Life, a strategy that many in the industry refer to simply as HODL.

Some traders suggest flocking to fiat currencies when crypto markets crash.

If done correctly, traders can generate very robust returns by shorting Bitcoin, an opportunity offered by many exchanges. This approach is very risky.