Artificial intelligence is taking over the world at an immense speed. Besides the conventional market, it aims to peak in the crypto world.
AI in cryptocurrency has made significant advancements and PwC further predicts that AI will add $15.7 trillion to the global economy by 2030, proceeding with a 14% increase in global GDP. Moreover, Gartner predicts that business value added through blockchain technology will rise to $3.1 trillion by the same year.
Cryptocurrency is digital or implicit money that uses cryptography for security and operates on decentralized blockchain technology. Unlike traditional currencies issued and regulated by governments (fiat currencies), cryptocurrencies rely on a distributed ledger system, which records all transactions across a network of computers.
With AI’s advancement, cryptocurrency has also seen a massive upgrade in scale and functions. Now humans do not need to research, invest, or risk management, as AI and Machine Learning are doing it efficiently with more revenue returns.
What are the Benefits of AI in Cryptocurrency?
AI in cryptocurrency enables traders and investors to decode complex market patterns, identify potential opportunities, and mitigate real-time risks. In short, with more use of artificial intelligence, it is a visible increase in profit ratio and business expansion.
With tools like ChatGPT, AI-powered crypto trading bots, and DeFi bots, traders can optimize their strategies, analyze market trends, and execute tasks quickly and precisely, providing them a competitive edge in the volatile crypto market.
The market has seen the following impact of AI in cryptocurrency so far:
- AI technology will help develop crypto security, optimize the crypto trading process and offer tools to improve the mining process.
- Among AI’s effects on the crypto market are improved mining, improved blockchain security, development of intelligent contracts, and implementation of tools for market forecasting.
- The collaboration of AI and blockchain focuses on better clauses and regulations to prevent security scams and fraud during transactions.
- With the introduction of AI in the crypto sphere, many AI-infused currencies and wallets came on the market. These currencies are less volatile and profitable than conventional currencies.
People are interested in buying AI crypto coins instead of conventional cryptocurrencies. The change occurs because of less risk, less volatility, proper regulation, and more accurate market prediction.
Impact of Blockchain and AI Convergence
At its core, AI seeks to replicate human intelligence by processing and interpreting data to make informed choices. In the context of cryptocurrencies, AI algorithms bring unparalleled sophistication.
Here are a few factors that can help you update your digital wallet.
Better Market Prediction
The crypto world is highly volatile and non-predictive. It’s impossible to tell the market trend, so that it can cost the owner millions of dollars in loss or profit. But AI can help prevent this. It gathers data from different platforms like social media or forums and creates a perfect analytical sheet for further investment.
Development of Automated Trading
With the collected data AI can perform repetitive tasks better than humans. The same is the case in crypto trading. AI can invest in different crypto-currencies efficiently with the owner’s automated setting. AI can analyze all possibilities and change its investment strategy if market trends change.
Enhanced Security and Risk Management
AI in cryptocurrency is proving quite effective in fighting cybercrime and online scams. There are developed programs that identify crypto companies during registration, automate ‘Know Your Client’ (KYC) processes, and analyze crypto data to prevent fraudulent transactions on the blockchain. They can also sense any fraudulent transaction in the wallet, so unlike human beings, AI can help identify and mitigate larger losses more efficiently.
Autonomous Trading Bots
AI-powered trading bots have gained popularity as they can execute trades 24/7 without human intervention. Based on predefined strategies, these bots rely on sophisticated algorithms to automate buying, selling, and portfolio rebalancing. While they offer convenience, users must exercise caution and set clear parameters to avoid excessive risks.
Better and Updated Software Handling
Some traditional cryptocurrency handling software needs to get updated with time and trends. It affects the performance and revenue allocation of the digital wallet. On the other hand, AI can handle all these problems in one click, for example, for automated troubleshooting, debugging, root cause analysis and detection, and search-based software engineering (SBSE).
Sentiment Analysis for Enhanced Trading Strategies
Human feelings strongly affect the crypto market, causing prices to change suddenly based on news, social media trends, and how people feel about specific cryptocurrencies. AI-powered tools analyze what people say online to understand their opinions and reactions, helping traders adjust their plans accordingly.
AI in cryptocurrency represents a paradigm shift in how we perceive, invest, and interact with digital finance. By harnessing the power of AI, traders, investors, and financial institutions can navigate the complexities of the crypto market with increased efficiency and confidence. However, it is crucial to exercise prudence, embrace responsible practices, and foster a harmonious relationship between AI and human intellect for the continued advancement of cryptocurrency technology. To learn more about artificial intelligence and cryptocurrency, visit AIThink-Bot for better and updated information.
The first and most popular cryptocurrency is Bitcoin, created by an unknown person or group using Satoshi Nakamoto’s pseudonym in 2009. Other popular cryptocurrencies include Ethereum, Ripple (XRP), Litecoin, and Cardano.
Besides conventional coins, ai infused coins like Graph GRT, Render, AGIX, Oasis, and Fetch.ai are stirring in the crypto world.
AI-based or traditional trading, cryptocurrency is highly volatile, risks privacy, and is prone to fraud and loss.