Crypto News

Bitcoin Bots: How They Work & Our Tips


Since Bitcoin’s price skyrocketed in 2017, the best-known cryptocurrency has been the talk of the town. For some time now, word has spread among investors that you can get even faster profits with so-called Bitcoin bots.

But is everything really that promising? Where there is money to be made, there are, of course, also scammers lurking. Bitcoin or crypto bots do not enjoy the best reputation in the media. But you can’t demonize them all by any means.

So, what do these crypto trading bots actually do, and how do they work exactly? What are the risks and which trading bot stands out as the best? We explore these questions in the following paragraphs.

 

What Does a Bitcoin Trading Bot or a Crypto Trading Bot Do?

In simple terms, crypto bots are robots, i.e. software programs that make fully automated trading decisions for the investor via an algorithm and are designed to provide the user with the highest possible profits on their cryptocurrency trading.

A cryptocurrency trading bot independently makes purchases and sales with cryptocurrencies Based on technical price analyses. This should enable higher profits than with manual day trading, even if you’re an experienced trader

The crypto trading bots thus take the trading off the investor’s hands. The advantages of a bot just like the Coinbase Pro trading bot are apparent:

  • The crypto bot works around the clock, seven days a week.
  • It is much faster at trading cryptocurrency than it would ever be possible for a human.

Moreover, basic knowledge about the crypto market is enough to make profits with automated trading.

Many crypto bots work on the same principle. The reputable provider makes its money through the fees it charges.

For example, depending on the provider, trading with a crypto bot may incur deposit and trading fees and sometimes account maintenance fees. As a trader, you should take these fees into account before choosing a provider.

Furthermore, it should be noted that Bitcoin bots are mainly suitable for day trading and are hardly ever useful as a medium- or long-term investment tool or trading strategy.

 

bitcoin bots

How Do Bitcoin and Crypto Bots Work?

In the world of trading, when we talk about a bot, we mean a program that independently makes purchases and sales of a crypto asset for the crypto trader. In other words, automated crypto trading.

Unlike traditional trading bots, which offer trading in stocks, currencies, and commodities in addition to cryptocurrencies, crypto bots specialise in trading cryptocurrencies, such as Bitcoin or Ethereum.

A Bitcoin bot is capable of analysing market data to detect market trends early and draw conclusions from previous trades, regardless of whether they were positive or negative. It is programmed to automatically identify signals that are relevant for trading because it knows very well what the specifics of cryptocurrencies like Bitcoin, Ethereum, or IOTA are.

Indeed, it is not always spot on with its assumptions, but experience has shown that you can achieve better results with a bot compared to manual trading. Thus, at least 70% of all trades should turn out positive.

To stay on the safe side as much as possible, traders should only invest as much money as they are willing to lose, especially at the beginning. This rule of thumb is true regardless of what type of investment you’re interested in.

In addition, it is recommended, especially for newcomers, to get to know a crypto bot and its functions via a free demo account.

 

white-computer-keyboard-with-red-keys-that-says-scam-alert

What Are the Dangers Lurking with Bitcoin Bots?

Not all websites can or want to provide a bot with a working algorithm:

  • Developers of fraudulent sites specifically target deposits from careless or inexperienced traders.
  • Then there are the less serious but still unfair practices with opaque fees. Transparency should therefore be a priority.

You should also be aware that there are crypto bot trading scams out there – so you should always DYOR (do your own research) and check independent reviews and only use a reputable provider and a reputable trading platform. If you’re ever unsure, you can always ask us for our opinion.

It is essential to get the full picture of a trading platform before depositing money. However, the lack of regulations makes it challenging to determine the seriousness of a provider.

Unrealistic advertising does not show seriousness, certainly not professionalism, and yet you can find it even with legitimate providers. However, if the website does not even state the company’s registered office, alarm bells should ring.

The degree of popularity does not necessarily indicate seriousness. There are also lesser-known providers that provide a reliable automated trading bot. A customer service team that also answers your questions is undoubtedly a good sign.

 

What Chances of Success do Bitcoin Bots Offer?

On the one hand, algorithms offer the advantage of recognising market trends via charts and reacting to them faster than a human. On the other hand, external news that can influence the price trend pass through the bot’s fingers.

Therefore, it would be disastrous to assume that only profits are generated. In general, you can compare a professionally programmed Bitcoin bot to a professional trader.

Because the crypto market is very volatile, experience shows that you can make higher profits than on the currency market. Weekly profits of over 200% are possible, but definitely not guaranteed.

Learning how to trade with Bitcoin bots also proves to be easy and is therefore particularly suitable for beginner crypto investors who want to quickly achieve a sense of achievement with cryptocurrencies.

 

Why Trading with Bitcoin is Worthwhile Even for Beginners

One thing is clear: If you recognise trends in time, you can possibly make a lot of money. A good example is the remarkable rise of the cryptocurrency Bitcoin.

Anyone who bet even a modest $20 on Bitcoin ten years ago and invested could increase their investment to almost 40 million dollars today. Let that sentence sink in for a moment but don’t let it cause FOMO (fear of missing out) that leads to irrational decisions.

Today, Bitcoin is on everyone’s minds; how to trade it successfully and whether you should even jump on this bandwagon anymore is what we want to shed some light on here.

Investors believe that the opportunities to invest in Bitcoin are not yet at an end, and therefore, it may well be worthwhile to still get into trading. Bitcoin, according to experts, is far from exhausted and can still increase in value considerably.

The only problem is that most people who want to invest have no idea about stock market trading and therefore do not even try it. Alternatives to trading on your own are professional traders who do the job for a fee and whom you have to trust or innovative tools that do the job for you.

 


Disclaimer:

The above references an opinion and is for informational purposes only. Do not take this as personalised financial advice or investment advice. The views expressed by the author do not necessarily represent the opinion of BitPrime.

 

Last updated: 23/03/2022





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