Cryptocurrency has generated consistent, and sometimes shocking returns over the past year. Since the first cryptocurrency emerged back in 2009; there has been rapid growth of the digital asset and we have seen the emergence of numerous other cryptocurrencies. There are over four thousand cryptocurrencies today, and more are being created constantly. Despite its many highs, cryptocurrency has its challenges, including technical hitches.

Notwithstanding the popularity garnered over the years, there are still confusions among new investors when it comes to investing in cryptocurrency. The trading and decentralization of the currency are still relatively new concepts. Also, the volatility and fluctuations in valuations can be further confusing. Hence, making emotion based decisions when investing has become rather inevitable in the crypto world.

To successfully trade and make profits investing in cryptocurrency, proper research and study of the market is required, and this takes a lot of time and skill.

Artificial Intelligence

AI is becoming more necessary and efficient for day-to-day tasks than humans, by the day. With the advancement of technology, it has been projected that one day, humans may become obsolete in many sectors. Right now, technology and humans complement each other, and work is carried out faster, and better. Like most advancing sectors, business and finance must now embrace innovation and continuously adapt to the evolution. Investors and traders are now looking to artificial intelligence for more profitable investment decisions.

Cryptocurrencies are built on blockchain technology, and having AI work alongside blockchain will address many of the challenges faced in cryptocurrency. AI’s ability to analyze large amounts of data, its high work speed, and accuracy will help in providing better investment insights, more accurate predictions, and automated trading.

For traders who wish to trade professionally, they can rely on Quantum AI and other professional AI-enabled applications.

Here are some ways artificial intelligence can help investors in the cryptocurrency market:

• Accurate Market Predictions: One of the biggest challenges in cryptocurrency trading in the volatility of the market. The high volatility of crypto trading makes it as risky as it is profitable, as unpredictable price swings could drive the value of an asset both up and down. If calculated correctly, it allows for traders to earn a steady income. In calculating the pattern and dynamism of the market, huge amounts of data will be analyzed and processed, which artificial intelligence can help with. By collecting, cleaning, and analyzing large sets of data, data analytics can provide valuable insights into a digital currency, and create accurate predictions about the future price of the asset.

• Market Sentiment Analysis: The value of an asset has been constantly affected by the influence of people and institutions in the past, for instance, dogecoin’s price once soared 20% after tweets from Elon Musk and Mark Cuban, the value of Bitcoin also rose 10% after news that Tesla will allow Bitcoin transactions. Sentiment analysis in cryptocurrency refers to the analysis of sentiments or opinions on an asset, that is, an overall positive sentiment would predict for a rise in the price of a cryptocurrency, while an overall negative sentiment would predict for a drop in the price of a cryptocurrency. AI can be used to process large data from the internet and blockchain to analyze the sentiment, and identify manipulations in the market.

• Automated Crypto Trading: Since AI can simulate emotional intelligence, using AI in high-frequency trading strategies is highly beneficial. Traders who execute trades quickly are more profitable than slower ones. Investors can maximize investments by using high-frequency automated cryptocurrency signals. The algorithms based off of predictive analytics and mathematical computation data, can forecast, and analyze the market to buy or sell cryptocurrencies within seconds. Financial algorithms can provide quick and efficient analysis to help traders and investors make the most profitable trading decisions. The trading process can be automated by an investor once a trading pattern is detected.

AI will never be able to completely replace humans in the investment world, but the combination of both can bring about more efficiency and returns in cryptocurrency investing.

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