Informative
Feb 7, 2025
How AI is Taking Over Cryptocurrency Trading
AI cryptocurrency trading is the new methodology that numerous leading companies all over the world are following for best results, because it is more efficient, more reliable, and more profitable method than using human cryptocurrency traders.
AI-based cryptocurrency trading has significant advantages over humans. After reading this article, you will never employ humans to trade cryptocurrency directly - only to oversee your AI traders.
Basically, using AI for cryptocurrency trading is a logical evolution of crypto trading, as you will discover while reading this article.
Why?
Let’s dive in!
Understanding AI in Cryptocurrency Trading
Why AI based cryptocurrency trading?
Well - it is faster, it is not muddled with emotion, and it can handle multiple marketplaces and exchanges in real time.
Furthermore, it can handle diverse portfolios, scan the internet for sentiment analysis or breaking news that is relevant to the crypto being traded, and it can handle multiple portfolios on multiple exchanges.
It can spot patterns and trends that are too complex for humans, and novel methods like Deep-Q Reinforcement Learning can create bots that are substantially better crypto traders than humans.
It can work 24/7, and needs no rest, no sleep, no food, and no time off - it is perfect for people who work in crypto trading because crypto trading never takes a day off.
It can use multiple algorithms in the same product and often, assembling tools that use all of these methods in the same product return the best results.
Finally, with the advent of deep reinforcement learning, AI traders can even surpass humans on efficiency and profitability because they can use backtests to predict the performance of their algorithm over historical data, and choose the best strategy.
What is backtesting, you ask?
Backtesting is the process of testing your current trading algorithm over historical data and testing which algorithm works the best.
This is difficult for humans, but computers can execute thousands of backtests with the click of a button and can choose the best trading strategies of tens of thousands of candidate strategies.
I believe now you can see why AI has the potential to replace humans completely when it comes to crypto trading.
AI crypto automation is officially the future of crypto trading.
And now you have no code platforms which automate the entire process for you so that you do not even need coding skills to create crypto bots of your own.
Let's do a deeper dive into all of these aspects.
Key Advantages of AI-Based Cryptocurrency Trading
24/7 availability
Crypto bots need no sleep and no rest and can monitor not just one market or exchange but multiple markets and the data coming in from all around the web in real-time with nothing more than costs for compute and an initial setup. They can continuously perform backtests and perfect the algorithms non-stop. The time for human trading is over, unless you are just a HODL crypto holder who does no regular trading for profit.
Diverse Portfolios
Crypto bots don’t have to stick to one crypto alone. Advanced optimization algorithms can allow bots to optimize diverse portfolios consisting of multiple Web3 projects and altcoins. The greatest profits could come from the coins worth the least and the trading techniques that are invisible to humans because they cannot monitor the prices of hundreds of tickers at the same time.
Multiple Exchanges
As an example of a very simple trade, let’s consider arbitrage. Arbitrage refers to the same coin having different prices in different exchanges. This means that the bot can sell the coin in the more expensive exchange, and buy the coin in the less expensive exchange, leading to an automatic profit that could vary according to the size of the holding. This (arbitrage) can be expanded to more than two exchanges and more than one coin, leading to optimized holdings with a very simple algorithm that can be easily implemented even by no-code.
Continuous Improvement Using Reinforcement Learning
Very much like the AlphaGo learning the Go board game over millions of iterations, Deep-Q based reinforcement strategies can execute millions of strategies and examine their profitability over multiple crypto exchanges - all in the background. This is the same technique that helped AlphaGo beat all human players comprehensively including the world champion, and it can be used for crypto trading as well.
Continuous Testing With Backtesting Historical Data.
There are terabytes of historical data for coins, altcoins, DeFi tokens, and numerous other Web3 organizations all accessible via APIs. It would be the ideal test for a no-code platform that integrates API access to nearly everything being traded in the crypto world and to use these to test the strategies created above with deep reinforcement learning. And even deep reinforcement learning can be created with a no-code tool when the platform has the right features.
To learn more about how to use AI for trading, Check out this article: https://www.binance.com/en-IN/square/post/456000
The Importance of Security
As a side note, it's worth noting that the best algorithms will be wasted if the platform is not secure.
Security is one of the most important features that an automated crypto trading bot platform must have.
Imagine earning millions of dollars with an automated bot using an exceptional strategy, only to wake up to find all your investments disappear with a sophisticated hacking algorithm!
There are many automated crypto trading platforms, but many platforms have a lot to be desired as far as security is concerned.
Botify.cloud is one platform where security certification is exceptional compared to other platforms.
You can read more about that here: Botify Certification | Botify.Cloud
Best AI-Powered Tools & Platforms for Crypto Trading
Some of the best available platforms that automate crypto trading are:
Marketed as the Shopify of crypto, Botify provides a way to trade crypto with six different types of automated bots with a variety of customization features available. This site is especially attractive because of its friendliness towards novices and non-developers, and the extensive no-code platform that allows one to create agents with drag-and-drop functionality. It is based on the Solana blockchain, so performance and platform fees will never be a problem. It is one of the rare platforms that offers low fees, is ideal for beginners, and allows automation without code as a primary feature.
3Commas is an extensive and comprehensive platform that offers a wide variety of features such as monitoring tools, integrated APIs, multiple exchanges, and something for everyone regardless of their current skill in crypto trading. Launched in 2017, it suffered from API key leaks in the past but has increased security sitewide since then.
However, its subscription prices are very steep and may eat into customer profits. Also, the complexity of the platform may be a turn-off for beginners and novices, and many of the best features are hidden behind the paywall.
Pionex is an AI platform that offers no less than 16 trading bots without subscription fees. Furthermore, the transaction fees are among the lowest in the industry. Pionex is accessible and cost-effective, and has a number of features that make it useful to those who cannot pay high fees.
However, Pionex has far less features than some of its rivals and is a more streamlined platform lacking many features for truly customized trading. Also, the low costs come with the disadvantage that advanced crypto trading strategies cannot be implemented.
Cryptohopper positions itself as the worlds leading and the most customizable trading bot platform in the world that trades 24/7 and can be customized to extremely high levels. It offers automation, optimization, and management of complex portfolios over multiple exchanges.
However, it offers subscription plans that are expensive, and full trading features may cost as high as 99 USD every month. The complexity of the features available may overwhelm beginners, and there have been data breaches in the security in the past. Finally, their backtesting features are not as comprehensive as some of their competitors.
The Future of AI for Cryptocurrency Trading
AI cryptocurrency trading is the future.
There is no question about it, for all the reasons mentioned already.
AI has the potential to come up with techniques and algorithms that even the best human experts could not dream of inventing.
The blockchain platform means that every trade is tracked and the security inherent in the blockchain is a huge advantage for all traders involved.
It is extremely likely that retail and institutional investors will soon start investing in crypto trading automation and that many large-cap companies could end up investing in this space.
While volatility and the inherent security of tokens in the crypto space might deter the more traditional investors, I can see the younger investors flocking toward crypto extensively.
Finally, we believe that this sector has just begun an explosive growth streak. Platforms like Botify.cloud are well positioned to become leaders in the market, especially to those with little to no experience in trading and also to the savvy investor seeking top-of-the-line security.
To learn more about AI and Crypto, we suggest the following article:
How AI Agents and Crypto Will Revolutionize Commerce
Getting Started with AI Crypto Trading
For many seeking high security and a low level of entry into the world of AI cryptocurrency trading, Botify is a suitable platform to get started with crypto bots.
There are over 6 different types of bots that you can create with the Botify platform, chose the trading bot to get started.
You can follow these best practices for ideal trading outcomes:
Define a Clear Strategy: Read up on various crypto trading strategies and choose a clear strategy for your bot for the best results.
Use Backtesting: Utilize backtesting and simulation to test the efficacy of your crypto bot, subjecting it to a wide variety of tests.
Secure your Account and API Keys: Make sure all your API keys are stored in encrypted form. Additionally, use 2FA and multifactor authentication everywhere you can.
Manage Risks: Set up rigorous checks for risks and define clear exit strategies and clear steps to take in case problems occur.
Start Small and Scale with Care: Start with small amounts, and scale as you grow, monitoring and updating your bot according to the conditions of the market.
Document Everything: Maintain logs of every single aspect of your trading. This is an invaluable tool for iterative refinement and improvement.
Following these best practices, you should be in an ideal position to create a high-performing bot.
Conclusion: The Future of AI Cryptocurrency Trading is Now
Crypto AI Bot automation is the future, any way you look at it.
One has to conclude from the evidence, that if you are not leveraging AI, you are falling behind.
Advanced machine learning will have a part to play.
But beginners can even get started with very low-skill level automation, with no-code environments.
A simple crypto bot implemented effectively could mean thousands of dollars in profit if the market conditions are right.
Of course, backtesting is critical, and following the best practices just outlined increases your chances of success by a long way.
To get started, you could explore the Shopify of crypto, Botify.cloud.
The potential of this platform is huge.
And of course, while there are limited resources for automated crypto trading with AI right now, expect this vertical to explode with new startups in a very short matter of time.
The future of crypto trading - is AI.
Start trading with AI today!
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