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Does AI Have a place in Bitcoin/crypto trading?

how AI helps in building your crypto trading.


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Western Clock

3 years ago | 3 min read

A multitude of people joined the crypto community in 2017 during the Initial Coin Offerings (ICO) boom. However, despite this increased popularity, there are still technical difficulties associated with cryptocurrencies investments.

Artificial Intelligence innovations have shown much-needed hope in integrating, monitoring, and profiting from such investments. This article investigates the impact of AI and automation with regards to crypto trading.

Crypto are generally very volatile. Some people entered during the Initial Coin Offering (ICO) wave only to regret it later when the prices dropped, suddenly. Luckily for most, technological innovations have come up with ways to analyze the market to make sense of what is happening currently and future prediction mostly based on past events.

With artificial intelligence (AI), the dream of automation is now looking more valid than it ever was. The evolution of powerful technologies like blockchain has greatly impacted this field as far as transactions and their transparency are concerned.

Predictions have lower barriers

According to westernclock.com trades usually place their trades after independent market analysis, signals from trade gurus, or via forex brokers. Whichever the case, it is critical to determine how AI fits into all this, especially in the context of cryptocurrencies investments. AI leverages past data, mathematically modeling it during analysis to generate future predictions.

The old adage ‘numbers don’t lie’ has never been truer, especially in this context as AI-backed predictions always come forth. Without AI, this work is just too cumbersome and overwhelming for the human brain.

Notably, it is the big players who can afford to utilize the tools and expertise required for such a promising venture due to the large financial demands. Such predictions are always more accurate where there is sufficient relevant information on previous events available for analysis.

Monetizable Insights

Trading strategies hugely rely on signals. AI aims to harness hard data to develop a platform that traders can use to inform their trading decisions based on data. Data scientists can also leverage the platform for monetizing their insights.

Creation and distribution of trading signals and indicators enables a crypto trader to increase their profits. The developed platforms do not even require advance user technical expertise to be able to benefit from.

AI is used to combine various trading approaches to make them more usable. Prediction markets are increasingly reliant on crowd-sourced information to predict future behaviors and events in financial markets.

Monetization channels incentivize data professionals and tech savvy individuals to collaboratively share market predictions with ordinary investors.

Automation and Interoperability

Artificial Intelligence (AI) based analysis and prediction tools enable investors to make informed market trading decisions. An invaluable improvement to this system would be improved interoperability and communication between automation and blockchain applications. Efforts continue to be made to this end with current centralized systems as well.

Due to its limited nature, blockchain only allows transaction transactions among people within an established network. This has slowed down the adoption of crypto for daily financial transactions.

Better Strategies and Trading Insights

Currently, transactional data is limited to each blockchain. AI tools like Endor can be utilized to facilitate blockchain data analysis and generate insights based on behavioral patterns for a given crypto.

Cross-platform data can reflect how cryptos and blockchain relate to finance in general. Analysis of this kind of information can potentially reveal more complex patterns and result in better quality insights.

The takeaway

Artificial Intelligence is a powerful technological tool that uses past information about relevant events to create a future prediction about similar events after a structured analysis. The adoption of AI in trading crypto has the potential to improve trader income by enabling them to generate better insights.

This applies to any type of approach to trading be it individual or via forex brokers. Even though it may have some limitations as is the case for blockchain transactions, AI in trading is of great value to the trading community.

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