Want the next big trend? There is artificial intelligence in crypto

Important takeaways

• The AI ​​hype train has well and truly left the station. But what happens if you add AI hype to crypto hype? Well, that hype train goes from steam locomotive to bullet train
• AI has the potential to fundamentally change the way the crypto universe works, and could solve many of the problems that have caused the sector to crash so hard in the past
• The key word is potential, and there are many issues and potential downsides that need to be covered before we see mainstream adoption.
• But when it comes to AI-powered crypto investing, the future is already here.

AI takes over. Speech bots like ChatGPT and AI image generators like Midjourney and Dall-E have shown the world what artificial intelligence is capable of. Technology companies are already trying to integrate it into their models. Within weeks of its launch, Microsoft is reportedly close to finalizing a $10 billion deal with its creators.

Crypto has become a serious player in the world economy, despite its ups and downs. Some investors are pouring their entire portfolio into Bitcoin and Ethereum. Many are confident that the crypto market will come back stronger than ever.

But AI and crypto together? It is an untapped potential that we are only just beginning to see being put to use. It can change both industries.

Download Q.ai today for access to AI-powered investment strategies.

The problem with crypto investing

Cryptocurrency does not work like a traditional financial system. Crypto is volatile and subject to wild fluctuations. We have seen more than one coin fold under the pressure of the economic downturn.

Many bemoan the lack of regulation, but crypto was born out of 2008 recession greed and a desire to move away from the big banks. The problem? Scams are rife, cryptohackers are rife, and there is no redress. Almost $2 billion worth of crypto was stolen last August. Many would never see that money returned.

All in all, crypto is developing an image problem when it comes to investors losing their money. AI could be the answer it’s looking for to tighten compliance without full regulation.

Why crypto and AI work so well together

AI’s strength lies in pattern recognition. Crypto’s ethos around the decentralization of money is admirable, but so far lacking in execution. Here’s why we could see the beginning of a beautiful friendship.

Fraud detection

Crypto and the blockchain are all about anonymity. This makes it vulnerable to a variety of frauds, such as market manipulation and outright theft. An AI algorithm trained to detect irregularities in transactions can help prevent these widespread cash outs.

Risk protection

Many see crypto trading as riskier than most. It’s a fair assumption to make after last year, but AI has the potential to insulate investors from big losses with algorithmic trading.

AI can spot trends and make decisions faster than any human. When it comes to trading, this works well – when you add volatile crypto into the mix, it makes even more sense.

The average retail investor can use this to their advantage with bundles of crypto trades, similar to ETFs. Not to mention that if crypto is perceived as less risky, more investors will join the party.

Automation

This is perhaps the biggest strength of introducing AI to crypto. So much of investing in crypto depends on your own understanding of the subject.

Gone would be the days of spending hours researching which crypto coins or tokens are the best to buy. AI can decide everything for you, freeing up valuable time. It can also reduce any human errors in crypto data.

Where can we see AI go with crypto?

In a few years, we could see AI have a significant impact on the crypto industry. It has the potential to monitor risk and compliance, trading decisions and portfolios as a whole. Here are some examples of how AI can help investors in crypto.

Sentiment analysis

AI-powered natural language processing can recommend which crypto is best to buy (and with Q.ai, in some ways it already does). If fed the right data streams, such as Twitter posts and news articles, the AI ​​program will quickly get a sense of public attitudes toward certain currencies.

NLP can also help with price predictions, identify any risks with a cryptocurrency, or try to guess future growth based on the number of people talking about it. It’s a neat AI tool that could soon dominate the crypto market.

Decentralized autonomous agents

If you know anything about Web3, then you’ve heard of DAOs. But you may not have heard of their cousin, DAAs. These agents are coded programs designed to make decisions.

How do these work in crypto? DAA becomes a powerful AI-powered fund manager. There is no human error or bias to worry about. You can sit back and relax while the AI ​​takes care of your crypto portfolio.

Customer experience

We could see AI being used to bring crypto into the mainstream once and for all. One of the most important gateways to stopping crypto right now is the technical language and understanding needed to make a transaction.

AI can create personalized advice tailored to risk tolerance, tailor marketing and communications around a user’s browsing habits, or provide curated lists of crypto educational resources.

With the barrier to entry gone, it may only be a matter of time before crypto becomes as normalized as Visa or Mastercard.

Compliance and Security

If financial institutions can pick up AI quickly enough, they can also harness its power to protect banks. Compliance and anti-money laundering schemes would be easier to implement with AI monitoring for signs of financial crime.

Real-time transaction systems monitored by AI can flag something untoward, giving crypto an extra layer of security that banks so often complain are lacking.

Are there any disadvantages?

The biggest concern is that AI is still in its infancy. We’re looking at years from now before it becomes a commercial and mainstream device, ready to handle the demands of a multi-billion dollar market like crypto.

AI needs a lot of data to train. If there is any bias in this data, it can lead to problems. In the case of crypto, we could see AI-powered market manipulation emerging in the market.

The darker side of Microsoft’s proposed large stake in ChatGPT is that it could remove it from the market entirely. The technology can be wholly owned by large companies, which then have a controlling factor in the crypto market. The power of AI being controlled in the hands of the few would not bode well for any innovation.

That said, artificial intelligence crypto is an exciting new opportunity that gives crypto traders a lot of hope. Considering how quickly both of these industries are moving, it’s only a matter of time before we see AI and crypto make some big moves together.

AI and crypto investing are already here

We’ve talked a lot about what the future might look like for AI and crypto, but in many ways that future is already here. At Q.ai, we are pioneering the use of artificial intelligence to give ordinary investors access to strategies and techniques usually reserved only for wealth hedge fund clients.

With our crypto kit, we put this AI to work in the crypto space.

This kit works by allowing our AI to predict the performance and volatility for the coming week, for a variety of different crypto trusts. It then uses these predictions to find the optimal asset mix on a risk-adjusted basis and then rebalances the portfolio accordingly.

It takes out the human element, allowing our AI to focus solely on the data it sees, rather than getting swept up in Reddit hype about Lambos and moon rockets.

Download Q.ai today for access to AI-powered investment strategies.

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