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Kc  · 09/01/22

List of ideas: How can crypto traders use AI for trading?

10/06/23 · Reports · This is not a financial advice
Altcoin Trading Blog

Note: This report was written in 2023 and remains published for reference purposes.

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Everyone is talking about OpenAI’s latest product ChatGPT.

Microsoft is pouring billions into it, while simultaneously laying off ten thousand employees and citing “cost cutting”.

Cryptocurrency is unlike any other form of finance in that is lives on the internet, which is why it could be well transformed through the use of AI.

But the last data acquisition of OpenAI ended in 2021, which means it doesn’t know of any of the latest events on crypto markets.

On the other hand, it can write code.

So, there must be ways to use OpenAI for your trading. By controlling volatility and increasing compliance, without imposing full regulation, AI could radically improve the investment potential of blockchain projects.

AI focuses solely on the data it is presented with. This lack of bias could be a good thing or a bad thing, depending how it’s used. Still, in time, this could better inform the human element of crypto investing by preventing errors and lowering risk.

Opinion mining

Also known as sentiment analysis, this method of analyzing crypto market data involves an AI recognizing and evaluating the opinions of human writers.

To do so, it checks for the tone of a piece and whether it appears to be presenting a positive or negative opinion. It can even identify a neutral attitude toward a subject through constantly updated streams of comments, such as those you’d find on social media. This could help traders combine the opinions of numerous commentators to spot areas of risk and gain insight into possible price movements.

Enhanced risk protection

Although crypto trading has a volatile reputation, AI can help to significantly reduce the level of risk involved through algorithmic trading.

AI can detect a trend as it begins to form faster than a human with access to the latest charts. Furthermore, it can be relied upon to make profitable decisions with just as much speed. Developers are already working alongside investors to design forecasting software which uses AI to scrutinize historic data from crypto markets and produces more accurate predictions.

The growth of automation

Understanding which crypto tokens are the best to buy or sell, and researching the fortunes of these currencies takes a lot of dedication. There are already several analytic tools that use AI, Nansen being one of the most known platforms.

However, by combining AI with crypto trading, individual investors will not have to carefully research each purchase. Instead, they can rely on automation to make their currency trades, in line with information gathered by algorithms. If you are interested in automated crypto trading and want to learn more, check out the guide at

Their experts will walk you through the process step by step and provide valuable insider knowledge to get you off to a great start.

Using AI to streamline PoW mining

The work of Bitcoin miners is intense and energy-consuming, with many ASIC processing units running all around the world to keep the blockchain flowing.

While the spent energy is a core feature of PoW blockchains and keeps them secure, there is a chance that in the future mining companies might start turning to AI-based solutions which use algorithms to streamline the whole backend operation. This could allow miners to work more efficiently, perhaps generate more profit or lower the environmental footprint. In the long term, these initiatives could convince larger numbers of venture capitalists to finance new Bitcoin enterprises.

A better customer experience

Lastly, the chat version of AI offers one obvious feature.

Crypto trading is still seen as complicated and many traders who prefer to stick with markets they understand well. The technical language involved, and the specialist knowledge required to make transactions can be off-putting. However, AI can deliver reliable advice that relates to the trading style of individual investors, as well as educational resources to target their areas of weakness. In the coming years, this is likely to make crypto more accessible to mainstream investors and as trusted as other, more familiar, financial products.

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