Can AI Help in the Evolution of Cryptocurrency Sector?


Cryptocurrency investments

Economists appear to be looking for a single piece of technology to improve their grasp of cryptocurrencies, which is predicted to grow across numerous industries. Artificial intelligence (AI) is said to hold the key, providing insights based on the study of market data. Industry research company Fortune Business Insights projects that the worldwide AI market will expand at a 20.1% compound annual growth rate, from $387.45 billion in 2022 to $1,394.30 billion in 2029. (CAGR). According to experts, the development of market price indications to aid cryptocurrency investors would contribute to the evolution of the bitcoin economy. “I think pattern recognition is one capability of AI that can be leveraged to improve cryptocurrency functionality. Although the partnership between AI and cryptocurrencies is still relatively young, it has the potential to reduce fraud and speed up transactions. Cost, however, will be a major deciding factor, Prashant Kumar, founder, and CEO of we Trade, a platform based on cryptocurrencies, told FE Blockchain.

Market-driven research has demonstrated that the coexistence of AI and decentralized finance (DeFi) can boost the effectiveness of financial transactions and lower fraud in the decentralized environment. Data scientists may utilize AI to give trading information to cryptocurrency users and assist in sentiment analysis, according to Analytics Steps, a provider of information services. AI can also aid in increasing liquidity and lowering volatility in the Bitcoin market.

The use of AI in DeFi technologies is still in its infancy, especially given the growing amount of data that is available and the wide variety of DeFi services available. According to Pratik Gauri, founder and CEO of 5ire, a blockchain-based platform, the union of AI, big data, and cloud computing will open up potential for both the prediction of market behavior and the creation of more complex DeFi models. Companies like Fetch.ai, Hudson River Trading, and Jane Street, among others, are said to use AI-based solutions in their cryptocurrency business operations. Machine-learning algorithms are used by platforms like TradeConnect to guide customers toward the best broker and bank for transactions involving digital currency. In this setting, international industries like finance, e-commerce, and investment projects can profit.

Furthermore, according to future forecasts, AI-based innovations will support trading bots that monitor swings in the price of cryptocurrencies. While AI has its limitations and the cryptocurrency market is unstable, Analytics Vidhya, a data-based knowledge portal, found that stability between efficiency and real value can help a cryptobot’s accuracy. “Considering that artificial intelligence is a fast-developing topic with numerous uncertainties, I believe it is challenging to make precise predictions regarding its future in the cryptocurrency market. Sathvik Vishwanath, founder, and CEO of Unocoin, a cryptocurrency exchange, stated that it is likely that AI will continue to play a significant role in cryptocurrency investing and trading, as well as other sectors of the financial industry.

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