December 15, 2024 Welcome back to our blog, where we aim to equip traders and investors with the knowledge needed to understand the crypto world and how to master the markets with our wide range of advanced crypto bots.
In today’s blog post, we will explore the past, present, and future of automated crypto trading.
We’ll start by reviewing the evolution of automated trading. Later, we’ll cover today’s main processes and trends influencing the crypto world. Then, we’ll analyze what we might expect in the future and how these forces could potentially manifest themselves in the crypto markets.
Later, we’ll delve into the recent developments in the automated trading world and explore how crypto bots can help us prepare for what’s to come. Finally, we’ll discuss what this realistically means for active crypto traders and what steps we can take today to ensure we are ready for whatever may happen.
Before we move forward with our busy itinerary, this is the time to remind you that all of the information presented in this blog post is intended solely for educational purposes and should not be considered a call to action or any other kind of financial advice. Traders must consider their financial status and risk tolerance before employing any crypto trading strategy. Crypto trading involves inherited risks; consulting with a qualified financial advisor before making any investment decision is highly recommended.
Adhering to the wisdom of an old saying, “The best way to predict the future is to understand the present,” we will begin our journey with the current crypto climate.
What are the main developments and shifts we are currently seeing in the crypto ecosystem that are most likely here to stay? First, let’s discuss the massive leap in mainstream adoption and market sentiment that the world of cryptos has undergone in the last couple of years.
From almost any angle, the crypto-verse has completely recovered from the distress it experienced after Three Arrows Capital and FTX collapsed. Not only that, but these events were a necessary step that enabled the crypto world to shake off subpar projects and become a more resilient ecosystem.
If you need proof of this unfolding process, abundant examples are available. From a surge in businesses and companies accepting crypto as a legitimate means of payment to a growing number of real-life use cases and even more endorsement from governments and regulators across the globe, as we saw with the recent approval of crypto ETFs, cryptos are everywhere.
When it comes to the crypto markets, all of the above is expected to draw more and more traders and investors, increasing overall liquidity in the various crypto exchanges and other DeFi protocols. Even with the rise of newcomers in the crypto world, those who did and will continue to have the most impact on the crypto markets are institutional investors, who continue to face fewer and fewer regulatory restrictions regarding how much exposure they’re allowed to have with cryptos. With rumors of a new friendly face expected to be in charge of crypto regulation in the U.S., the road seems wide open for full-on adoption by banks and other financial institutions.
As more sophisticated and deep-pocketed traders enter the playing field, these rich entities can potentially affect the crypto market in ways we haven’t seen or experienced before. In most cases, this is done to make inexperienced traders liquidate their unstructured position for a loss and make off with their funds. This means that on top of elevated levels of liquidity, we should also expect a more volatile and less predictable trading environment. Considering the new launch of Bitcoin options trading by the Chicago Board Options Exchange (CBOE), one of the biggest marketplaces in the world for institutions to trade leverage positions, this further proves the point we are trying to make.
In summary, while it will be challenging to assess crypto prices accurately in the future, certain things can be expected regarding the general trading environment.
On the one hand, we can see higher levels of liquidity in the crypto markets. This should support a more efficient trading experience with lower fees, quicker executions, cheaper leverage, and lower slippage. On the other hand, it can also mean increased levels of volatility in the markets. This presents traders with higher potential returns, but the tradeoff is exposure to more substantial risks.
As we’ll see later, crypto traders from all levels can minimize risk and maximize profits in this challenging trading environment with the right tools and by following a few simple steps.
Following suit alongside the assets they’re designed to trade, the field of automated trading bots is also experiencing a surge of innovation that is not expected to go away any time soon.
Crypto bots have come a long way from their humble beginnings, when automation could support only basic, one-rule trading strategies, with no customization features and no real measures to mitigate risks. Back then, it wasn’t as easy as it is today to operate these systems, and even if you did, their performance was much flakier than it is now.
As technology advances and becomes more efficient, crypto bots offer an improved user experience for traders. From simpler and improved interfaces to the ability to personalize your bots through designing your strategies or optimizing them with advanced settings, automated trading is much better than it used to be.
In turn, these advancements caused a significant surge in the popularity of trading bots, encouraging all major crypto exchanges to embrace automated trading to attract new users. We are witnessing the results now: automation suppliers and crypto exchanges working hand in hand, offering traders more precise and reliable executions than ever before.
While these improvements occur regularly, the most recent development that excites people is the potential inception of artificial intelligence (AI) and other machine learning (ML) algorithms into automated crypto trading.
Through their inherited ability to train and improve outcomes independently, these technologies offer almost unlimited potential to be exploited to understand better and predict the market. This new level of autonomy, mainly combined with improved results, provides traders with an unprecedented trading experience that is unquestionably worth exploring.
As we mentioned in our guide on AI crypto trading, it’s essential to acknowledge that this promising technology is still in its infancy.
Again, that doesn’t mean that crypto bots aren’t improving and getting more sophisticated by the minute despite any connection to artificial intelligence; they are. From new analytical tools, like our new demo account and our advanced backtesting feature, to the ability to carry on more complex and multi-layered strategies, traders have more support than ever to elevate their trading skills. Coupled with improved, more straightforward user experience and more precise executions, the trajectory of crypto trading bots looks very promising.
Now that we know what the future holds for crypto traders let’s consider together what steps we should take to be fully prepared.
As mentioned throughout this blog post, cryptos have officially changed their status from assets many were skeptical of to a fundamental part of our global financial markets.
This new upgraded status means that the crypto markets are affected not only by simple supply and demand dynamics within their ecosystem but also by other macroeconomic forces.
Some of the primary things that crypto traders should look out for are factors like global conflicts, interest rates, and inflation rates, as well as any changes in them. In addition, the performances of other dominant financial markets, such as the U.S. stock exchange and essential assets like oil and precious metals, can also indicate cryptos, especially Bitcoin.
For crypto traders, it means that on top of following the crypto news, they must also be aware of what’s going on in the traditional economic markets of fiat. An excellent and very recent example of this can be found in the latest bull run that BTC and many other altcoins experienced after the U.S elections, a macro event that many wouldn’t have expected to have had such an immediate effect on crypto prices (don’t worry, we’ll delve deeper into this particular topic in our yearly summary).
Regarding automation, crypto traders can do many things to stay ahead of the curve. Let’s start by discussing AI, which seems to be one of the major buzzwords.
Similar to the process that nearly every new technology undergoes before achieving mainstream adoption, the truth is that AI and ML algorithms are expected to be released in an open-source format to the general public only for a while.
What is more likely to happen is similar to many other cases where new and upcoming technologies are asked to replace old paradigms. The first to enjoy these innovations will likely be trading professionals or AI experts who were personally involved in the development process. That said, crypto traders can still access these types of trading solutions.
For now, your best option for crypto trading with AI is to subscribe to a few designated signal channels. These closed-sourced platforms, known for their trading expertise and early adopters of new technologies, are one of the first places crypto traders can access AI-driven trading signals.
For a genuinely autonomous trading experience, our signals bot automatically converts these signals to market orders in the blink of an eye, ensuring that traders get the most out of each signal received without lifting a finger.
Except for AI-driven signal trading, there are many other aspects of crypto trading that traders can and should master to be more prepared for the future.
It’s a good idea to start shifting your focus to crypto bots designed explicitly for the trading environment we’ve described thus far. For example, grid bots are designed explicitly to exploit volatile market conditions and have massive potential to be even more efficient in the future than they are today.
Another example is crypto bots designated to generate income during bullish markets like DCA bots. If you are optimistic about the future of the crypto world, learning how to master the DCA trading strategy won’t be something you’ll regret later on.
As a final piece of advice, crypto traders should also learn to fully take advantage of all the trading tools they can access. From learning how to properly utilize leverages to discovering the best way to optimize trading strategies through demo trading, backtesting, and other advanced features, it’s never too late to start preparing for what’s to come.
To wrap up, things are looking very promising for crypto traders in the years (and years) to come.
Cryptos, the crypto markets, and crypto trading bots are all evolving hand in hand, pushing each other’s boundaries to achieve a better and more efficient ecosystem for all participants.
While risks remain constant or might even increase, crypto traders already have the tools to transform these future ventures into lucrative opportunities, thanks to our wide range of crypto bots and advanced customizable features.
If you are serious about taking complete control of your financial future, we at Cornix invite you to explore our endless range of trading bots and learn firsthand how we can help you become a more efficient and profitable crypto trader. With a free trial, flexible pricing plans, and other advanced trading tools, our all-in-one automated trading solutions are an opportunity you don’t want to regret years from now.
