The world of cryptocurrencies is an unpredictable place.
The price will be as high as the sky one second and fall as deep as the Grand Canyon the next.
And that’s not all, crypto trading happens 24/7.
This means that a good opportunity can come at any time of the day and it is pretty much impossible for anyone to pin it down.
But is there a way to help the traders take advantage of those opportunities?
Well, luckily for you, the answer to this lies with AI crypto bot.
These bots can work around the clock and make trades on behalf of the traders.
In this article we will learn all about AI crypto trading bots, what they are, how they work, and some reasons why they are better than human traders.
So, What Exactly is an AI Crypto Trading Bot and How Does it Actually Work?
Artificial intelligence is everywhere these days and it’s no surprise that we can see it in the crypto trading scene too.
AI crypto bots are very similar to regular bots, they are programs that are designed to monitor the market and make trades for the traders when the opportunity comes.
But there is one huge difference that makes AI trading bots the better choice.
Just as the name implies, an AI Crypto Trading bot comes with artificial intelligence and machine learning programmed into it.
This means that this bot can use the knowledge it has been trained on to automatically monitor the current market in real-time and analyze historical data to predict when it can make the next call.
Besides, with machine learning capabilities, it can learn from its mistakes and improve to make better decisions in the future.
DID YOU KNOW?
Many lower-risk AI crypto trading bits boast a success rate of about 67-90%.In comparison, the success rate for an average human trader is nowhere near this number.
In simpler terms, by learning from historical data and predicting patterns, this bot does not need any kind of monitoring and it can even make decisions on its own.
But this raises the question,
How are AI Crypto Trading Bots Better Than Human Traders?
While these AI bots can easily outperform regular old bots, but, can they match human intellect?
Are they any better than their human counterparts?
Well, here are nine reasons why these bots are definitely better than any human trader.
They are Faster
Trading bots can constantly monitor the market for changes and act on an opportunity within milliseconds.
This is a lot faster than any human on the planet, except if you’re Barry Allen.
They Have No Bias
As humans, it is in our nature to make judgments on our biases and emotions.
But AI bots do not have that.
They can monitor the market and are not swayed by any biases in the physical world unless you teach them to.
Besides they have no emotion and can only act on hard facts/data that they are given access to.
They Are Awake All the Time
It is humanly impossible to be awake all the time unless you want to end up in a hospital bed.
But AI crypto trading bots are different.
These bots can constantly keep running and keep track of all your chosen assets in real-time.
So, if the Bitcoin is set to rise, then this bot can easily snake the trade for you.
Analysis Based on Historical Data
We all know the saying that history repeats itself.
The same is true for the crypto market, there is always some pattern before an asset’s price can rise or fall.
These bots can analyze all the historical data and analyze the patterns that will make the asset rise or fall.
Besides, with access to historical data, price patterns, news, and some other indicators, these bots have a higher chance of success than a regular old trader who has just seen the news.
They Can Test Strategies Before Execution
One thing that artificial intelligence is good at is analysis.
An AI Crypto bot can use its machine learning capabilities along with the AI component to run practice predictions to test strategies on what will work and what won’t.
It can then run simulations in real-time to test if the strategy can work with the active market and adjust accordingly.
Spreading Your Portfolio and Managing Risks
Trading bots can actively keep track of different markets all at the same time.
This means that they can manage all the coins in your portfolio and manage them all in real time.
It can easily detect the correlation between different assets and hedge positions in the market, which can reduce your risks.
It Can Adapt to Changing Markets
The crypto market can change in seconds, it can be down one second and up the next.
These bots can easily see the changing market and adjust your trading strategies accordingly.
So you will always make a profit.
They Learn From Their Mistakes
With the help of artificial intelligence and machine learning, an AI crypto trading bot can also see where it made a mistake and make changes all on its own.
It can also avoid the same mistake again thanks to its advanced algorithm and calculations.
No Human Error
We all know how costly mistakes can be in the crypto market.
AI bots are designed in such a way that they cannot be affected by human biases, emotions, or judgment.
They can make logical decisions based on data, market sentiment, and proper analysis.
So, making human-like errors is pretty much non-existent in these bots.
But, Can You Really Trust an AI Crypto Trading Bot?
It’s a “yes” and a “no” at the same time.
Why did you give such a complicated answer you ask?
On the surface, the idea of using an AI crypto bot for trading can sound pretty great.
And if you are busy, then it can be the answer for you, as it can pretty much run all the time.
Many of these bots are designed with user convenience in mind, but still, just like any new technology, there are some risks that you need to keep in mind.
The Risks of Using AI Crypto Trading Bots
- Nothing online is 100% secure, and an AI crypto bot is no exception. These bots can be hacked and your money can get stolen.
- Just like any online service, these bots can often run into issues or have bugs in their algorithms, which may cause them to make bad investment decisions.
- You need to know that not all crypto bots are the real deal. It can be a scam too.
But, how can you actually avoid these risks?
Getting around these issues is pretty easy.
You need to keep in mind that even if you’re using a bot from a good and reputable service, you can still run into technical issues or bugs.
Online services are never 100% safe so only invest the amount that you’re willing to lose.
And finally, scams are a pretty common thing in the crypto world, so make sure that you vet and check the reviews of any bot you want to use thoroughly.
So, the final verdict is, “yes.”
You can definitely trust a crypto trading bot, and while there are still risks involved, you can easily avoid them.
The Future of AI Crypto Trading Bots
With new innovations in technology coming in every day, the integration of artificial intelligence and machine learning into cryptocurrency trading bots is just the beginning.
With AI getting more advanced, more and more complex features will be added in the future.
Aside from this, in the future, you might just see AI bots integrating with decentralized finance (DeFi) platforms and doing advanced predictive analytics.
This will add more to the application of AI in cryptocurrency.
The Global AI Crypto Trading Bot Market was valued at USD 21.69 Million in 2022 and is anticipated to reach USD 145.27 Million by 2029, witnessing a CAGR of 37.2% during the forecast period 2023-2029.
Conclusion
While the crypto market is open 24/7 human traders can’t make trades all the time.
AI crypto trading bots are like godsends.
They are trustworthy and good tools that can constantly keep track of the market and make trades for you.
But still, you need to do your research before choosing a bot from a service that you can trust.
These bots can easily outsmart any human trader when making trades and they are not biased or emotional.
It can make its own analysis, predictions, and test strategies before putting them in practice and the best part is that there is little to no chance of human error.
