Published 2 months ago • 4 minute read

How will AI affect the cryptocurrency market?

One of the biggest financial markets to trade on is cryptocurrency. This market has a cap of over $4trn and sees a high volume of trades per day. With top coins such as Bitcoin, Litecoin, Doge and Ethereum to put money into, it also has a good choice of assets. All this has seen it progress from Bitcoin’s initial launch in the late 2000s to develop as a sector in a positive way.

This constant development has been facilitated by technology such as web-based crypto exchanges. Many experts believe that AI is the next big thing about to push cryptocurrency investing forward. As in other industries, the potential for this tech in this market is huge. It should certainly be seen more often soon – for this reason, it is worth finding out more about it. Although we will take a look below, a more detailed explanation of AI for crypto trading can be found at AskTraders. This site is well known for being an impartial source of expert advice for traders and those who invest in cryptocurrency.

How will AI affect the cryptocurrency market

How could AI affect the crypto scene and how people trade coins?

How will AI affect the crypto market?

AI exists to make people’s lives easier and allow businesses to operate more efficiently. This is broadly the same idea when using AI in the cryptocurrency market. One effect that you would not be surprised to see as a result is AI bringing more people into crypto trading.

Many people who might invest in this market are still put off by the need to learn how it all works in detail. They may also worry about other things such as volatility, not understanding financial markets, or not trusting their own judgement when looking at data. AI-based software could resolve this and make crypto trading more accessible to more people.

Of course, the presence of modern tech such as AI could also persuade more people that crypto is a modern, legitimate market to invest in. The overall impact of these factors (plus others, such as the news that crypto is Tom Brady’s preferred salary option) could see an influx of new traders and a boost for the whole industry.

How might the way that people trade be impacted? 

More automated ways of trading

At present, most people trade manually and without the help of technology. While this is fine to a certain extent, it does put a lot of pressure on traders. As the crypto markets are fast-moving and open 24/7, it can be a big task to personally analyze trends, interpret charts and sift through data. By the time you have done all this, you might well have missed your opportunity!

AI could help by leading to more automated ways of trading. AI-backed software, for example, could take on the load of interpreting trends and backtesting data before feeding back actionable results to consider. The time savings here could be huge and mean that you get access to the best opportunities before they disappear. It also takes a lot of the hassle and stress out of crypto trading.

More strategies used by traders

We might also see AI leading to a greater range of useable strategies. At present, it can be a lot of work to think of and properly research a new trading strategy. This often sees people not bothering and sticking with the same few ad nauseum. AI, however, could make pinning down and testing new trading strategies a lot simpler. It would also make this much quicker. As a result, you could well see traders rolling out new strategies regularly with the help of AI.

Trading could become more reliable

One of the best features of AI in crypto trading is that it cuts back on human error. As the software does the work, mistakes are eliminated and input errors disappear. What does this mean for how crypto might be traded as we move forward? It could well see people trade with a lot more confidence and be more bullish about opening trades from AI analysis. This may well see traders open up a greater frequency of trades and also find that trading as a whole becomes more reliable.

AI could have big impact for cryptocurrencies

The above shows that AI could have a massive effect on not only the cryptocurrency market but also how people trade. It really does seem like AI-backed software for traders can have positive effects. If this makes trading easier and brings more people into the sector, then it is no bad thing.

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