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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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Which Cryptocurrencies Will Survive The Altcoin Apocalypse?

With the massive crypto market rout that has occurred in ‘red August’ many are now talking of an altcoin extinction which could spell the demise for the majority of them. Which ones are likely to survive is the key question. Most of the altcoins have dropped way below their price levels this time last year and are 80-90% down from their all-time highs. This has led many to surmise that it could be game over for many of them. According to Ted Rogers, the president of crypto wallet provider Xapo, this extinction level event could wipe out 90% of the altcoins; We could be in the midst of the extinction-level event for “cryptoassets” that many maximalists have predicted. 90%+ of @CoinMarketCap list will disappear eventually – might as well happen now. Meantime, lower BTC price means incredible opportunity to buy more #bitcoin — Ted Rogers (@tedmrogers) August 14, 2018 This sentiment has been echoed by Ethereum founder Vitalik Buterin when he famously said that most of the coins on Coinmarketcap will go to zero back in October before the big run up. Buterin’s comments were aimed more at low quality alts, or ‘shitcoins’ as they’re commonly known in the trade. Rogers, however, believes that only Bitcoin is the king and now is the best time to buy it. He may be onto something since Bitcoin’s market dominance has increased to 53.7%, its highest level this year. Surviving the Extinction If there is merit to these words, which altcoins will survive? To find out we need to look back to the ones that have survived such market drops in the past. These are most likely to survive this slump and possibly grow stronger in the future. Going back to 2013/14 is an almost mirror image of the current market situation with a huge pump at the end of the year and a massive dump throughout 2014 when markets shed 80% before recovering again in 2015. Total Market Capitalization 2013-14 Looking back at altcoins in 2014 we can see Litecoin as the second most popular cryptocurrency, priced at just $9. Also in the top twenty altcoins back then were XRP, Dash, Nxt, Dogecoin, Bytecoin, Maidsafe, and Monero with a few others. The rest have faded into obscurity so it is likely that these few will survive the current market depression. More recently there were a couple of smaller jumps and drops in 2016. Altcoins around back then include Ethereum which has taken and held the second spot as it is now the platform of choice for 90% of blockchain startups. Also in the top twenty were the same coins as in 2014 plus Nem, Lisk, DigixDAO, Waves, Steem, Siacoin and Stellar. This is not to say that they will definitely be around next year but they have a better chance than some of the newcomers simply because they have weathered these storms before. A Working Product or System Another factor to consider is whether a project has a working product or is just still a concept or work in progress. This could be fodder for extinction as non-operational altcoins are weeded out in favor of ones that actually have something on the table or have made significant partnerships. Looking at today’s top ten Cardano is the worst performing altcoin dropping 93% from its all-time high. It does not yet have a fully working product and is largely conceptual though the roadmap does look busy, whether this is enough to avoid extinction remains to be seen. EOS is similar with no real functioning product and a massive slide of 80% since the hyped pump it had in April. Iota also seems ahead of its time and has lost over 90% since its ATH, and then there is Tron which must be the most overhyped altcoin in the list that still doesn’t really do anything yet. There are too many to mention, 1845 on Coinmarketcap in fact, and this article is largely hypothetical but if such an apocalypse is to occur, only those that have survived the test of time and have some degree of product functionality have the best chances of surviving again. Image from Shutterstock The post Which Cryptocurrencies Will Survive The Altcoin Apocalypse? appeared first on NewsBTC.

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