Can artificial intelligence help boost cryptocurrency yields?
Cryptocurrency is more than just digital money; it is an online movement which has swept the world. While the UK may be holding back a little in terms of embracing the likes of bitcoin, this certainly hasn’t stopped British traders from continuing to engage in the marketplace. The sheer unpredictability of cryptocurrency may be causing some concern in the higher echelons of the financial institutions; however, the benefits of a decentralised, unified funding source are all too clear to many.
With this in mind, digital currency surely goes hand in hand with AI. Technology continues to evolve at a blistering pace. While much of the Bitcoin trading and mining movements are still human-controlled, emerging trends show that artificial intelligence could hold the key to making more money and sounder investments for years to come, one of my favourites to pay attention to is Bitcoin Era.
One of the biggest benefits of bringing AI into crypto trading, it is argued, is the lack of emotion it can show for investments. Artificial intelligence and machine learning are, to some extent, already used in crypto markets and mining, meaning that a move to a more AI-friendly landscape is not going to be too big a leap. The risk of keeping crypto investments purely human surrounds emotion.
Traders and investors are, no matter how experienced, always going to be swayed by emotion to some extent. Therefore, it stands to reason that crypto enthusiasts should use AI or programs to help make tough decisions. What’s more, sources state that data-sourcing for overnight trading is far more precise than predictions made by human experts. AI is already being used in cryptocurrency to try and predict where the markets will rise and fall. In a landscape which is famously volatile, this is nothing short of a major feat.
Can AI maximise wins?
Further statistics show that winning trades can increase hugely through AI adoption. Data from intensive research claims that artificial intelligence is better at spotting signals which could lead human analysis astray. Wins could, theoretically, see a boost of around 20% compared to human engagement. This alone has given much food for thought to traders who have not yet considered using AI and machine learning to their own ends.
Further research even shows that were AI systems present during some of the biggest market crashes of the past 30 years, they were clearer and more precise than human analysis on prediction alone. This is, for many traders, a real breakthrough. Given that much of the trading system is already automated to some degree, further adoption and integration seem likely to be given a tremendous boost.
Using AI to increase yields
The idea of being able to use AI to boost crypto yields may sound a little exclusive. However, people are using bots and programs to help manage their investments every day. There are online guides and repositories where people can download and learn how to tweak AI to do their investor bidding while they are asleep.
What’s more, there appears to be a rising trend in banks and financial institutions coming around to the idea of using cryptocurrency in their central operations. As more major economies focus on cryptocurrencies, it is increasingly likely that AI popularity will increase. However, what isn’t clear is quite where AI will go next.
At this point, some traders are still keen to take physical control of their investing. While the statistics for AI’s predictive success are well-documented, it stands to reason that some people may feel uneasy about trusting code to manage their activity completely. However, there is no reason why they cannot use a model of investing which incorporates manual control and automated investing.
AI is already necessary
Finally, there are also firm arguments which state that artificial intelligence is wholly necessary for us to actively understand cryptocurrency and where it is heading. Uncertainty over bitcoin and other digital money helps to contribute to the overall volatility. Therefore, to achieve greater stability, it could be argued that AI can help to navigate some of the more complex streams of information. Certainly, with so much data available to crunch, it would be nigh on impossible for humans alone to process everything.
These arguments and statistics do indicate that the world of cryptocurrency may certainly be better off with AI around but we will need to see whether or not the majority of traders continue to adopt such an approach to wider investing. For the novice adopter, it may be worth researching the tools which are out there, and reading deeper into the statistics.