Companies and regular users are slowly adopting Artificial Intelligence to automate several time-consuming tasks. From processing information and creating reports to providing forecasting insights and influencing a business’s decision-making process, AI can save time and financial resources with minimum effort.
There’s no wonder AI and crypto would work well together because investing in cryptocurrencies involves performing monotonous activities of researching and reallocating assets for a long-term or short-term period for profit. For example, if you want to learn how to buy Bitcoin on Binance, you must look into the available purchasing methods, create an account, and closely watch for price changes to undertake the next step.
While investors should accomplish some steps of this process for security reasons, AI can help in operating other tasks and help increase productivity and lower risks. Here’s how.
AI can Automate Crypto Trading and Investing
Trading and investing can be strenuous as limits should be taken to avoid risks, and specific strategies require automation for enhanced safety. For example, dollar-cost averaging involves making small purchases at a set date to reduce volatility impact. Research must also be done continuously, especially to understand the technology behind each project.
But with Artificial Intelligence, investors can save time on these tasks since AI algorithms can analyze crypto data and recognize patterns to make accurate predictions about the market’s dynamic. AI leverages machine learning and data analytics, helping investors make better decisions.
AI can Ensure Safety and Provide Fraud Detection Features
Although the crypto industry is one of the safest due to operating through cryptographic technology, there are ways in which hackers can lure someone into providing their contact info. Other strategies include finding bugs in the smart contracts powering up transactions and blockchains, which require more nodes to operate.
But with AI, investors can safely surf the market since this technology can do the job of millions of nodes. Through its pattern recognition features, AI can immediately recognize any anomalies on the network, from phishing attacks to unusual spending behavior. Plus, it can introduce superior biometric verification methods for exchanges and digital wallets with a higher level of reassurance.
AI can Enhance User Experience through Personalization
One of the greatest features of AI is personalization because it takes information and delivers specialized content and data in a matter of minutes. Some companies already use this technology to analyze their audiences’ customer behavior and get insights on how they should alter their products.
Hence, crypto businesses should base their activities on AI more because it’ll help them guide newcomers and provide valuable information for professionals in developing their investing strategies. Whether for virtual assistants or chatbots, AI can enhance user engagement and satisfaction by tailoring its responses and guidance for every investor.
How Easy is it to Implement AI in the Crypto Industry?
Both AI and crypto are relatively new on the market and, therefore, might be prone to various challenges, from the lack of proper regulation to traditional systems that can’t upgrade their operation systems. Hence, blending and adopting AI and crypto must be done with patience and a lot of work. One of the most prominent problems involves the data integrity and quality introduced in AI algorithms. Outside of crypto information, most data on the internet are either inaccurate or biased due to its sourcing. Providing reliable insight is impossible in this situation as all the flawed data leads to inefficient decision-making.
On the other hand, operating AI to enter the crypto market requires solid computational power to withstand the working algorithms. The crypto industry is already blamed for considerable energy usage, contributing to increased carbon emissions. Typically, Bitcoin mining consumes massive amounts of energy and electricity for minor transactions, a trend that might worsen during the following years.
Finally, the ethical side of AI in the crypto industry must be tackled because AI might access and use sensitive information. Contrarily, most crypto users prefer this financial option because they can avoid bureaucracy. At the same time, using AI might raise concerns about privacy and security if no delegated professionals control it.
Should Investors Wait for Government Regulations?
Currently, there are barely any regulations on cryptocurrency, hindering investors’ willingness to make the switch from traditional to modern banking. Indeed, crypto is volatile and can pose risks to those who are not paying attention to their finances. Still, fiat money is also affected by inflation, an effect of worldwide conflicts.
Most of the time, entering the crypto market means seizing the day and not putting off investments or trading waiting for regulations to happen. While this was doable in the beginning of crypto and before AI became famous, now investors must be more careful with their actions because the ecosystem is constantly changing.
Governments and official institutions have their eyes on crypto now. For example, the SEC has already provided its opinion on digital assets, and it’s not a favorable one, which is why actions have been taken against spot ETFs and the SEC deliberately avoided providing insight on what investors should do to fit in the legal system to make them turn their investments to something safer and regulated.
However, this action not only increased users’ negative outlook on governments but also led to massive interest in spot ETFs as they presented interesting features. Lately, some BTC ETFs have been approved, and Ethereum ones have yet to follow the same path, but crypto users had to wait to leverage their investments until further guidance was provided. In conclusion, it’s currently best to wait for the government’s next move before doing something risky as an investor.
Final Considerations
Artificial Intelligence was the peak of 2023, but as technology evolves and crypto is steady on the market, these two concepts can merge to provide better features. With the help of AI, crypto could be introduced to automatization at every step, helping investors with boring activities and valuable insights so they can allocate their time and resources to more critical areas.
