Can AI Be Used for Cryptocurrency Trading? 5 Things to Know


Crypto trading has come a long way from being a suspicious activity to the point when people use crypto to pay for their vacation. If you yourself haven’t invested yet, then you probably have a friend who has invested in bitcoin or some other cryptocurrency. Although they have been around for more than 10 years, they are still a relatively new concept. One of the reasons is insufficient information literacy.

What cryptocurrencies represent today – perhaps it can be best shown by the example that in 2010 you could buy two pizzas for 7 thousand bitcoins, and today one bitcoin is worth almost 23 thousand dollars.

Yes, almost unbelievable, but true. What’s even more unbelievable is the fact that trading is being taken over by artificial intelligence. Given the fact that the market experienced huge fluctuation in the past decade, and that there are more and more coins available, having a tool that is able to handle all of this is simply a must.

Here are a couple of things you should know about trading with the help of artificial intelligence…


1. Such Trading is Automized and Can Analyze Huge Amounts of Data

As you already know, successful trading is all about being able to handle lots of data about this turbulent market. Not a lot of people can allocate that much time to sit, follow, and digest all that is happening in the crypto world. That’s where AI finds its best use, as it can go through a large amount of data (from, articles, forums, social media comments, history of the market, etc.), digest it and make it available for the investors so they can decide in which direction their trading activity should go. This way, whatever the decision is, it will be based on facts.

2. Dynamics of Change Are Easier Predicted

We’re talking about very sophisticated technology that has the power to even predict how the market will change. It works nonstop, keeping a close eye on and comparing rates, and fluctuations, detecting patterns and using it all to predict what may happen next.

3. Their Degree of Accuracy is Super High

Although it depends on the type of data one serves to the system, once digested the end result is impressively accurate. It’s called artificial intelligence for a reason. But, it’s also important to know that different platforms using it, have different degrees of accuracy. Some claim to be as much as 95% accurate, some less, which is why you should choose accordingly, and make sure it is fed with accurate data.

4. It Can Utilize Sentiment Data

The sentiment is very important in crypto trading, as the popularity and usage of certain currencies depend on how people feel, or what opinions they may have about certain coins. AI can collect this information and analyze them to let traders know whether the sentiment about certain coins is positive or neutral. Naturally, when an asset enjoys positive sentiment it’s a signal the price will go up.


5. AI Crypto is the Future

This is a relatively new category of crypto projects that are focused on merging artificial intelligence and blockchain technologies. The projects span a wide range of approaches, from incorporating AI directly into blockchain validation mechanisms to services for decentralized application developers.

What all AI altcoins have in common is that they thrive on using artificial intelligence for blockchain applications and web3 projects. Incorporating artificial intelligence into blockchain technology has the potential to enable dynamic smart contracts, automated transactions, faster processing speeds, and more.

As in all previous trends, from meme tokens to metaverse and gaming, some players in the crypto industry are trying to get on the AI ‘ship’ and take advantage of the opportunity. Several popular AI altcoins have seen triple-digit gains in recent weeks.

What is the purpose of these altcoins?

Each one is different from the others due to the broad nature of this category. Some are aimed at creating markets to buy and sell AI algorithms, while others use AI for specific applications such as parsing big data on the blockchain and making predictions. In the future, more complex projects that use artificial intelligence to create more dynamic experiences in virtual worlds are expected.

One thing to keep in mind is that AI is very flexible, so crypto AI platforms can serve a wide range of potential uses.

Generally speaking, AI altcoins work much like any other type of cryptocurrency. Most of them are in ERC20 token format, which means they are compatible with any crypto wallet that supports the Ethereum blockchain.


What does the future hold?

The value of digital currencies may rise, but many investors see them as speculation rather than real investment. Although many consider crypto, to be the currency of the future, it should be noted that the currency needs stability so that traders and consumers can determine what is a fair price for goods. Bitcoin and other cryptocurrencies have been anything but stable for most of their history.

Experts in this field believe that cryptocurrencies will grow in the future. First of all, because of blockchain, which is already in use in many aspects of life, they believe that there will be even more of it. In the next ten years, it is estimated that it will be woven into almost all possible spheres of life. From paperwork, law, publishing, voting, etc. Therefore, they will also withdraw cryptocurrencies.

The reality is that digital assets are here to stay. Many startups are already funded by selling them. The applications of cryptocurrencies are manifold and will remain despite the fact that traditional banks are not interested in the survival of cryptocurrencies. Therefore, if you don’t want to regret it in a few years and want to return to this moment, then try to prepare for the future and start researching cryptocurrency investments today. AI is by your side, to make the activity as fruitful as possible.