Does Artificial Intelligence play a role in the crypto market?

October 19, 2022 01:29 AM AEDT | By Rupam Roy
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  • Artificial intelligence is among the hottest trend and is expected to grow in the coming years.
  • The crypto market trading is live always, which means some activity is going on every time.
  • It is hard to predict the future trading of the crypto market as several risks are associated with the market.

The crypto market has grown in recent years while getting attention from several new investors and the next-gen Millennials. COVID-19 also increased the popularity of the crypto market worldwide.

On the other hand, another growing trend is Artificial Intelligence or AI. It has gained traction in recent years, with several experts hoping that the trend continues to grow in the coming years with global digitalization in progress.

Now, as crypto is already based on a technology called Blockchain, several tech-savvy investors and crypto market enthusiasts are looking for the role of artificial intelligence in the cryptocurrency market.

Today, we will discuss the important role of artificial intelligence in the crypto market and how it could help investors in crypto trading.

Role of AI in crypto trading:

Crypto trading carries several risks, which also makes crypto trading more volatile. The volatility can cause both gains and losses, depending on several things.

But predicting the future trading of the cryptos is nearly impossible for individuals as some huge data and sentiments may impact the overall trading of the market or even an individual asset.

Now, given the growing popularity of AI and its use cases throughout the broader financial market, investors are also exploring opportunities for it in digital currencies.

A notable number of trading players are entering the crypto market each day, including hedge funds, banks, etc. The investing or trading model used by the players are sometimes complex, and that's where AI can help the newbies and the institutional investors.

A growing number of crypto exchanges allows investors today to use algorithmic trading. This has helped many new investors with little experience or knowledge of digital currency trading or time to keep track of the market movements.

In addition, unlike the stock markets, the trading in the crypto market remains open all the time, which means every time something is happening in the digital currencies market.

It makes it difficult for investors to keep track of each movement, which AI tools could easily track. AI can analyze extensive data and help investors forecast the market's future trading condition.

In addition, through data analytics and other AI-driven tools, the sentiments or discussions over any asset or the overall market on social media platforms, blogs, or news, could be tracked in less time and effort compared to manually doing all these tasks.

Role of Artificial Intelligence (AI) in crypto tradingSource: ©Kalkine Media®; © Canva Creative Studio via

Bottom line:

Although AI tools decrease the chances of human error in calculating vast data or collecting data from many sources, the predictions might not be wholly correct every time.

Machine learning and AI have gained popularity and are expected to grow significantly in the coming years, but certain risks remain for fully relying on AI-based predictions.

So, investors should consider all the risks and historically serious volatile trading of digital currencies before putting their bets on any assets.

Risk Disclosure: Trading in cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory, or political events. The laws that apply to crypto products (and how a particular crypto product is regulated) may change. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading in the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed. Kalkine Media cannot and does not represent or guarantee that any of the information/data available here is accurate, reliable, current, complete or appropriate for your needs. Kalkine Media will not accept liability for any loss or damage as a result of your trading or your reliance on the information shared on this website.


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