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What Are Bitcoin Trading Bots?

Getting involved in cryptocurrency has become a bit more convenient over the past few years. Buying one’s first Bitcoin – or a piece of one – is primarily a mental barrier. When it comes to actively trading Bitcoin, however, the need for guidance has never been greater. This is where Bitcoin trading bots come into the picture, as they offer a lot of functionality for users to explore.

The Bitcoin Trading Bot Phenomenon

Over the past few years, the global interest in Bitcoin trading bots has grown significantly. This has allowed developers to create their own solutions, all of which are appreciated by users and traders. Every solution has its own benefits and drawbacks, yet they all aim to facilitate the trading of Bitcoin for profit.

Despite this growing popularity, a lot of people still don’t understand the true purpose of Bitcoin trading bots. That is only natural, as they are a very different breed of trading tool. Unlike holding a cryptocurrency portfolio for a long time, trading bots give users the opportunity to rebalance their holdings at any given moment. In a volatile industry such as cryptocurrency, that is no unnecessary luxury.

Because a trading bot can directly interact with an exchange API, it is capable of placing buy and sell orders on behalf of its users. These decisions are usually made based on current market conditions and technical analysis performed by the bot itself. While not all decisions will lead to short-term profits, the majority of trades executed by a bot will have some positive consequences in the end.

The main selling points of a Bitcoin trading bot are its efficiency, automation, and 24/7 accessibility. As a human trader, it is impossible to make split-second decisions around the clock, as our bodies require sleep, food, and relaxation. A trading bot, on the other hand, is a collection of software tools and algorithms which operates without interruption.

How much automation one can achieve with a Bitcoin trading bot highly depends on which software is being used. Some tools allow for far more customization than others, although nothing prevents users from coding their own trading bots. Not all trading bots are created equal, mind you, as some could have catastrophic effects on the Bitcoin industry as a whole. The old Willy trading bot, which caused the Mt. Gox collapse, is a great example of how things can go awry when automating the trading process.

The big question that people seek to answer is whether or not Bitcoin trading bots actually work. Answering that question is not as easy as it may seem at first. Most bots work just fine and deliver on their promises. However, cryptocurrency markets remain highly unpredictable and volatile. Not even the best trading can counter some of the sudden price swings affecting the Bitcoin price.

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Huobi Global Will Support Stablecoin Trading Through its HUSD Offering

It would appear there is still plenty of stablecoin action on the horizon in the cryptocurrency industry. More specifically, there has been an influx of such currencies over the past few months. Huobi Global is now planning to introduce its own stablecoin, although it is a bit different from what one would expect. The Huobi Global Stablecoin Plan On the surface, it is rather commendable to see so many exchanges offer stablecoins to its users in quick succession. Gemini issued its own stablecoin a few weeks ago, and Circle has their own currency pegged to the US Dollar as well. Combined with the likes of USDT and TUSD, it is evident there is a fierce battle for market traction taking place right now. That should introduce more market liquidity moving forward, although the reality may be very different. Assuming stablecoins will take off, however, Huobi Global might be on to something in this regard. More specifically, the company acknowledges there is a demand for trading with stablecoins, but the exchange is doing things a bit differently first and foremost. They are effectively launching a program which seems much like yet another stablecoin, however it is nothing along those lines. To put this in perspective, Huobi Global will support deposits of Paxos Standard, TrueUSd, USD Coin, and Gemini Dollars. These four stablecoins have all come to market in 2018 and are quickly bringing some much-needed competition to Tether. As a result, a lot of exchanges are rushing to integrate support for these stablecoins Huobi Global is no different in this regard, even though the company will not necessarily allow for trading in either of these stablecoins. Instead, the platform will convert deposits of these four stablecoins into something known as “HUSD”. It is a bit similar to how Bitfinex converts USDT deposits into USD, even though they should be treated as to separate currencies. In the case of Huobi Global, their conversion to HUSD makes sense, as users can still withdraw this balance in any of the supported stablecoins. It is simply the actual trading which will not occur in PAX, TUSD, USDC, or GUSD. To a lot of users, this might seem a bit unusual. After all, there is not necessarily a need for converting stablecoins to a native “currency” and then converting it back to said stablecoins. For Huobi Global, the company is evaluating this approach and they might integrate support for additional stablecoins in the future. Any stablecoin not meeting the company’s risk control standard will be removed from the platform accordingly. The bigger question is whether or not this project will generate a lot of success. After all, this added layer on top of dealing with stablecoins will not necessarily appeal to a lot of investors, but the concept also has a fair bit of merit in the end. It is good to see the exchange not necessarily introduce its own stablecoin, even though HUSD will serve that specific purpose. The post Huobi Global Will Support Stablecoin Trading Through its HUSD Offering appeared first on NullTX.

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