Can AI Help You Make Better Crypto Investments? A survey of the latest tools for AI traders

Last year it was the metaverse that took the world by storm. This year, artificial intelligence (AI) seems to be the new hot topic, and probably for good reason.

While the metaverse remains an ambiguous, abstract concept, AI’s potential effects are more concrete and are already being noticed, thanks to popular tools like OpenAI’s ChatGPT, which was acquired by Microsoft to a value of 10 billion dollars.

As AI continues to prove its capabilities, this rapidly developing technology is now being combined with another growing sector: cryptocurrencies. Programmers have designed AI-based tools to help you navigate the wild world of crypto. If you’re interested in what the convergence of AI and crypto looks like today, here’s the breakdown you need.

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AI meets crypto

The most common use of AI in crypto trading is through the use of something called a bot. Think of a bot as your own personal financial advisor. Except this financial advisor doesn’t sleep — it always has its eyes on the market, and its only motivation is to serve your best interests. These robots are revolutionizing trading because the human error and emotions that inevitably arise in every decision we make don’t actually exist.

Bots can help your trading in a handful of ways. Firstly, as mentioned, they are emotionless. They make decisions based solely on data. But they also do much more.

Bots automate tedious work typically associated with buying or selling a position, take into account historical and live market data, make trades for users with precision when specific criteria are met so opportunities are not missed, and can replicate proven strategies.

Furthermore, there are even AI tools capable of analyzing massive amounts of data from multiple sources outside of crypto markets, including social media and news articles to gauge investor sentiment. Sentiment analysis tools use natural language processing (NLP) to analyze social media and news articles to quickly identify positive or negative sentiment and alert traders to potential market movements. If certain conditions are met, the bot can even execute trades automatically.

Perhaps the most innovative and exciting aspect of AI trading tools is the potential for machine learning. These machine learning algorithms can be programmed into a bot to analyze market data and identify patterns, trends and anomalies. By analyzing historical market data, robots can predict future market movements, such as when the market is likely to experience a bull or bear run.

The current landscape

Today, there are a multitude of AI portfolio managers for crypto. A simple search on the internet is likely to return thousands of results, but although they all offer more or less the same services, there are significant variations in products that users need to be aware of.

First is the price. The cost of these tools varies widely. Some are free and some can run you almost $100 a month.

Then there is the product itself. There are bots that have extremely technical features that allow experienced users to fully customize trading strategies, while others take a more hands-on approach. With these simpler products, investors can choose a preconfigured strategy based on individual goals.

A necessary disclaimer

While the allure of letting a bot manage your entire crypto portfolio may be hard to ignore, it should be noted that while this technology has come a long way and has great potential, it is still in its infancy.

Before choosing an AI portfolio bot, be sure to do your own research and ensure that the strategies it uses meet your criteria.