The convergence of artificial intelligence (AI) and cryptocurrency has been one of the major talking points in Web3 recently. From the rise of AI coins to AI-driven projects, there have been several exciting integrations between both industries this year.
According to data from CoinMarketCap, AI and big data tokens boast a total market capitalization of more than $4.8 billion, and manage an average 24-hour trading volume of nearly $444 billion.
Earlier this year, the AI and big data crypto market experienced a growth spurt. This bullish run saw numerous AI tokens, such as AGIX (Singularity NET token), gain as much as 100% in a single week.
That said, if you feel you might have missed out on the bullish run of AI coins, you can still benefit from the intersection of artificial intelligence and cryptocurrency. You can use AI – on an individual scale – to help you gain better returns in the digital asset space.
1. Automated Trading Bots
Automated trading bots remain one of the most efficient ways for you to leverage the excellence of artificial intelligence to increase your returns in crypto.
With the aid of an AI-powered trading bot, you can analyze market trends, and price movements, and enter potentially profitable positions automatically.
You can program these bots to utilize various technical indicators, historical data, and machine learning algorithms to automatically execute trades.
For example, you can build a crypto trading algorithm based on the 25- and 50-day SMA crossovers with the help of artificial intelligence. This indicator provides buy and sell signals founded on the overlap of the two moving averages.
Interestingly, you don’t need any technical knowledge or coding skills to pull this off. All you will need to do is to input the specifics of the trading bot in an AI chatbot, like ChatGPT, and then copy and paste the algorithm’s code in your trading app’s chart.
2. Yield Farming and Staking
Yield farming and staking are still two of the best ways of earning a passive income in cryptocurrency – and are often confused to be the same.
Staking refers to the process of holding a certain amount of a specific cryptocurrency in order to support its network or protocol, while earning extra tokens as a reward. Yield farming, on the other hand, involves earning an interest by storing your crypto assets in liquidity pools of DeFi protocols.
These two concepts provide an avenue for you to make a substantial amount on the side. Interestingly, you can employ artificial intelligence for identifying the most lucrative yield farming and staking opportunities. Through the analysis of various protocols, their interest rates, and risks, AI can help you optimize your passive income generation from crypto lending, liquidity provision, and staking services.
3. Price Prediction Models
Due to the volatile nature of the market, crypto prices are constantly changing. Hence, price forecasting forms a major part of cryptocurrency trading. However, several factors, such as demand and supply, historical prices, inflation, and market sentiment, can make it difficult to anticipate crypto price trends.
Fortunately, AI-powered prediction models can now be used to anticipate crypto prices at a reasonable degree of accuracy.
These tools, based on advanced machine learning (ML) algorithms, can help improve the efficiency of your trading decisions. Although AI-powered price prediction models are more popular in stock trading, they are beginning to gain some traction in the cryptocurrency space.
Overall, an AI-powered price prediction model can help you make some extra cash from crypto. By assisting in identifying trends and patterns based on data, you can execute long-term trades with minimal technical analysis and better decision making.
4. Automated Whale Tracker Bot
Monitoring crypto whales’ activity and replicating their transactions is one of the best ways to catch a profitable trade early. The best part is that artificial intelligence can relieve you of the stress of manually scanning through a list of several whales’ activities.
With the help of AI suites, such as Browse.AI, you can build a robot that can monitor data from any website and notify you of any changes on the website. By integrating this robot into a crypto data site, you can automate the process of tracking crypto whales’ activity. This AI-powered robot will notify you of any action or trade the whale executes, depending how it is programmed.
You can then use this timely information to make your investment decisions.
Also Read: 7 Tokens Crypto Whales Can’t Stop Buying
5. Sentiment Analysis
AI can analyze people’s opinions and sentiments surrounding various cryptocurrencies. Sentiment analysis involves the use of AI and natural language processing (NLP) to assess people’s perspective and sentiments on various topics.
By analyzing social media posts, news articles, and other online texts, AI can help you identify potential price movements and execute profitable trades.
The combination of artificial intelligence and cryptocurrency provides several lucrative opportunities for individuals looking to augment their income. Whether through the use of automated trading bots or advanced price prediction models, there are numerous strategies to leverage AI and generate passive crypto revenue.
However, the AI industry – and the technology – is still in its nascent stage and is constantly evolving. Hence, it is important to exercise caution and do your due diligence before engaging in any AI-driven trading or investment activities.
[Editor’s Note: This article does not represent financial advice. Please do your research before investing.]
Featured Image Credit: ChainDebrief
This article was written by Opeyemi Sule and edited by Yusoff Kim