In cryptocurrency trading, artificial intelligence (AI) is a game-changer, notably impacting both exchange operations and trading performance. AI can help automate trading strategies, process large data sets, predict future market movements, and make rational decisions based on data analysis.
However, the technology also has drawbacks and ethical concerns.
Metaverse Post interviewed Gracy Chen, Managing Director of cryptocurrency trading platform Bitget, to explore the AI’s advancements and challenges in the crypto world.
Bitget has been integrating AI to enhance user experience and operational efficiency. One of the core applications is AI-powered crypto trading. The exchange has designed solutions that aim to streamline the trading process and improve profitability for users.
“We’ve developed a customizable, crypto-native version of ChatGPT to offer real-time market analysis. Generative AI’s capability to process data at speeds unattainable by humans enables us to offer actionable trading insights with greater efficiency,” Chen said.
One area where AI has proven particularly beneficial for the crypto exchange is in handling translations for its multi-language services more efficiently. The customer service department also uses AI to respond faster to queries, including customized information and trading data.
Bitget’s Innovation Zone, recently expanded to include AI-related tokens like AGIX, IMGNAI, and ALI, has leveraged artificial intelligence for meticulous asset review. The crypto exchange has also introduced Martingale AI and CTA strategies, each tailored to different trading styles and risk appetites.
AI grid trading strategies allow traders to execute orders at specific intervals and price ranges. The AI model automatically generates strategies based on user-defined parameters, such as trading pairs and investment amounts.
Exploring the Constraints of AI in Crypto
The biggest limitation is that AI algorithms are trained on historical data. Yet, past performance does not always indicate future results, especially in a volatile market like crypto.
AI can eliminate the emotional aspect of trading, but that’s not entirely foolproof. Algorithms can sometimes overlook human intuition or insights gained from qualitative data, like market sentiment or regulatory changes, which could be crucial in trading decisions.
Chen argued that while AI is an incredibly potent tool, it should be used in conjunction with a robust understanding of both the technology and the crypto market dynamics.
She highlighted data usage as a crucial ethical aspect. AI models rely on extensive data for analysis and decision-making. It is imperative to ensure that the sourcing, storage, and utilization of this data strictly adhere to privacy regulations and ethical standards, safeguarding users’ interests.
“Yet, we mustn’t forget that while AI brings vast possibilities, it’s not without its challenges and risks, which need to be handled with due diligence. These challenges can be effectively addressed if the industry establishes robust ethical guidelines and governance mechanisms,” she said. “This surge in AI-driven ventures could very well stimulate advancements in regulatory frameworks, bolstering safety measures and upholding transparency in the industry.”
AI Advantages and Impacts in Cryptocurrency Trading
AI-driven trading offers clear advantages over traditional human or standard algorithmic methods. According to Chen, speed stands out as a significant benefit, as AI can process and interpret vast quantities of data at an unmatched scale compared to human traders
“AI can identify patterns quickly means traders can develop more efficient strategies and spend less time on manual market analysis. Also, AI models, like grid trading and Martingale AI, can automate transactions based on pre-set parameters, freeing traders from constantly monitoring markets and making split-second decisions,” Chen said.
When it comes to emotional objectivity, AI is unrivaled, she added. Human traders often grapple with emotions that can influence their trading decisions adversely. AI removes this element to a great extent, leading to more disciplined trading based on logic and historical data.
Integrating artificial intelligence could substantially optimize trading strategies in terms of its impact on traditional financial markets. Chen shared that Robo-Advisors already manage assets expected to grow at over 14% CAGR to $2.02 trillion by 2027. The global algorithmic trading market is set to surge to $3.56 billion by 2030.
These figures suggest that AI could become a cornerstone in financial markets, possibly altering how investors approach asset allocation, risk assessment, and long-term investment strategies.
Navigating Sudden Market Fluctuations with AI-Based Trading
AI-based trading systems are designed to adapt to rapid market changes efficiently. Utilizing real-time data and historical trends, algorithms adjust trading strategies on the fly. For instance, Bitget’s AI Grid Trading system places buy and sell orders at specific intervals and price ranges and leverages real-time asset fluctuations to identify emerging patterns.
Features like Martingale AI increase investment after market downturns, drawing on historical data to make informed decisions even when the market is experiencing high volatility.
These AI tools can automate the trading process and quickly adjust to market conditions, minimizing losses while maximizing gains. The AI’s speed and computational power enable it to navigate the notoriously volatile crypto markets more adeptly than traditional human trading, thereby giving users a strategic advantage.
AI Is The Future of Financial Management
Given the rapid growth in assets under AI management across various financial sectors, it’s clear that the future lies in automated, intelligent trading. This is highlighted by the successes of several projects like Worldcoin, Pragma, Zama.ai, and Giza.
“Bitget is considering implementing AI in all departments. We will continue to refine and introduce new AI-based trading strategies, building on the success of our Martingale AI, CTA, and grid trading systems,” Chen told Metaverse Post.
Chen believes artificial intelligence is instrumental in making digital asset trading more efficient, accessible, and secure for everyone involved.
Source: mPost
