Future trends in AI and crypto trading
A few years ago, discussion about cryptocurrency AI trading would have been deemed somewhat futuristic. Yet the current explosion of these tools is just the beginning — there are many more sophisticated innovations on the way.
Wondering what the most prominent future trends in AI and crypto trading are? We’ve listed a few of the most relevant below.
Automated trading
In terms of the technology itself, one of the biggest trends is the development of AI crypto trading bots. Machine learning has incredible capabilities to analyze large amounts of data about historical price movements and make predictions. AI crypto trading bots can analyze this data in real-time and execute trades on behalf of users, helping them to earn greater profits.
While these bots have existed in some form for a while now, recent developments in AI are about to make them much more powerful, accurate, and accessible.
Risk management
As well as helping users make better trades, AI technologies like machine learning could help reduce traders’ risks.
Traders are typically at odds with their own emotional impulses, but AI can take a more rational approach, allowing it to predict when a period of volatility is coming and prompt users to take more conservative positions. It can also simulate how different trades would fare in volatile market conditions.
As well as protecting users from themselves, machine learning can detect fraudulent patterns and security issues.
Greater ethical emphasis
So far, a lot of the talk around artificial intelligence trading has centered around the technology. However, it’s becoming increasingly apparent that AI crypto trading isn’t just about technical capabilities — it’s also about the ethical questions regarding how the technology will be put to use.
Crypto visionaries have always discussed the power of digital assets to democratize finance and the internet. Yet AI crypto trading tools have the potential to take things in the opposite direction. If many bots fall into a small number of hands, they could promote market manipulation.
Greater compliance with authorities
Regulation is one of the greatest challenges in the AI crypto trading sphere. Authorities like the U.S. Securities and Exchange Commission (SEC) may have been slow to catch on to the relevance of cryptocurrency, but they’re beginning to catch up. Now that AI has entered the picture, we can expect to see even more regulation in the future.
Many tools and platforms that rely on AI trading will have to implement stricter regulations regarding data privacy, security, and transparency to prove that they’re not causing market manipulation.
This may require major players in the place to collaborate with regulatory authorities and both legal and technology experts, especially as many authorities need help understanding crypto and knowing how to define cryptocurrencies legally.
Forging the path forward
Whether you’re ready to sign up for an AI crypto trading bot or just want to keep your finger on the pulse of change when it comes to artificial intelligence trading, there’s plenty to be excited about. Greater regulation, automation, risk management capabilities, and an increased emphasis on ethics will be some of the biggest trends in this space in the years to come.
