The potential of the cryptocurrency market is huge and analysts are looking for technology to help them better understand the sector. Artificial Intelligence (AI) with its ability to analyze market data and provide insights is being seen as a possible solution.
As per Fortune Business Insights, the AI market will grow from an estimated $387.45 million in 2022 to $1.394.30 billion in 2029, at a compound annual growth rate of 20 percent. AI is believed to have the capability to revolutionize the cryptocurrency economy by providing investors with market indicators. “AI boasts features such as pattern recognition which can be used to enhance the capabilities of cryptocurrencies. The merging of AI and cryptocurrency is a relatively new concept and has potential to tackle fraud and enhance transaction speed, but cost will be a major factor to consider,” Prashant Kumar, Founder and CEO of weTrade (a crypto based platform) told FE Blockchain.
Research oriented towards AI and DeFi (decentralized finance) has proven that they can work in tandem to increase efficacy and reduce fraud in financial dealings. Data scientists at Analytics Steps, an information services firm, are reportedly using AI to give crypto users trading intelligence and analyze the sentiment surrounding the digital currency market. AI can also be used to infuse liquidity and decrease volatility in the Bitcoin market.
“Current applications of AI in DeFi technologies are still in the early stages, particularly as the amount of data available increases and the types of DeFi services expand. I am optimistic that the combination of AI, big data and cloud computing will generate opportunities for both predicting market behavior and creating more complex DeFi models,” Pratik Gauri, 5ire founder and CEO, stated.
Fetch.ai, Hudson River Trading, Jane Street, and other companies are reportedly using AI based crypto applications. TradeConnect, a platform, employs machine learning algorithms to help clients find the right broker or bank for cryptocurrency related transactions, which can be beneficial for sectors such as finance and e-commerce.
Future predictions suggest that AI developments could help to monitor cryptocurrency market fluctuations with the aid of trading bots. Analytics Vidhya, a data-driven insights portal, has highlighted that AI has its limits and the crypto markets are inherently uncertain. However, a balance between efficiency, timeliness, and accuracy can maximize a cryptobot’s accuracy and real value. “It is hard to make accurate predictions about the future of AI in the cryptocurrency market as the field is rapidly changing and has a lot of unknowns. Nevertheless, AI is likely to keep playing a crucial role in cryptocurrency investing and trading, as well as other areas of the financial industry,” Sathvik Vishwanath, Founder and CEO of Unocoin, a crypto exchange, concluded.
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