From what it is understood with its quick, effective and data-driven techniques, the use of automated trading through the implementation of artificial intelligence may have the potential to encourage and allow cryptocurrency traders to make better use of predictive analysis. “Automated trading systems can keep track of large market data, identify trends and trade faster by using complex algorithms and advanced analytics. This automation reduces human mistakes and other human-oriented mistakes, giving traders a more structured and unbiased approach,” Om Malviya, president, Tezos India, a blockchain adoption entity, told FE Blockchain, adding that automated trading can provide 24 hours monitoring, allowing traders to identify minor market changes.
The global cryptocurrency market was valued at $ 4.67 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 12.5% from 2023 to 2030, as per insights from Grand View Research, a market research platform. Experts believe that the cryptocurrency market is currently facing consequences from the action taken by the U.S. Securities and Exchange Commission (SEC) as Bitcoin (BTC) and Ethereum (ETH) are down by over 2% in the last 24 hours. The downfall of BTC also created an impact on other altcoins due to which the overall cryptocurrency market fell by 2.28% to $1.1 trillion.
Supposedly, this uneven market status of the cryptocurrency world can be reduced by the use of automated trading systems. “The collaboration of AI and cryptocurrency trading can improve the trading algorithms, predictive analytics, risk assessment, and automated decision-making. As AI develops further, it will also contribute towards revolutionising the financial industry,” Shivam Thakral, CEO, BuyUcoin, a digital asset exchange, explained.
Interestingly, as global industry estimates, the global AI financial technology (fintech) market can reach $22.6 billion by the year 2025. AI becomes more accessible to people with AI-based trading tools such as Kavout, Auquan, Pionex, Kryll and EquBot, among others, it is expected that more people will invest in cryptocurrency. “ It is expected that the inherent technophile nature of cryptocurrency enthusiasts makes cryptocurrency a class where technology-enabled trading can gain popularity. However, the key challenge in cryptocurrency trading is volume. Volume remained uneven through the boom cycle and now they are weaker. So it’s important to ask what problems will AI-based trading will solve,” Utkarsh Sinha, managing director, Bexley Avisors, a boutique investment bank firm, concluded.
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