New ways to assess risk

As the amount of data on these digital currencies continues to pile up, crypto-traders are finding it hard to find investment insights manually. This has prompted the emergence of AI and Machine Learning driven solutions. The application of computer algorithms driven by AI and Machine Learning to analyze big data and execute stock trades is not something new in the mainstream financial markets.

AI and Machine Learning can be applied in the crypto markets in similar ways to the way it’s used for data analysis. The key advantages of algorithm-driven investment decisions include speed and accuracy, which are the two most vital elements to success in the highly volatile crypto markets. Also, machine-driven trading does not require the trader to have specialized skills in a certain discipline or to have insider information to compete.

A blockchain based Democratic platform for Algorithmic Trading.

For instance, Signals, a blockchain platform launched on the Ethereum Network, seeks to utilize Machine Intelligence in order to enable crypto traders to make smarter and faster trading decisions and maximize trading profits. With the Signals platform, both the experienced and inexperienced crypto traders can access trading algorithms ranging from traditional technical analysis to the sophisticated machine learning techniques.

Here comes the cryptocurrency Robo-advisor.

Another example is Robo Coin Advisor, a platform that has been working in progress since 2014. The projects, which claim to be the first robo-advisor for cryptocurrencies, combines AI with cryptocurrencies and blockchain to provide investors with daily forecasts and statistics relating to cryptocurrencies and their tokens.

But how can we be assured that the trading algorithms are accurate and will make the right call when subjected to a lot of varying data? The answer can be found in back-testing. The process involves subjecting the algorithm to historical data in order to determine how it would perform in various scenarios. Platforms such as the Quantopian have been providing back-testing avenues for stock-trading algorithms and some are now offering such solutions for crypto trading.