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Automated Crypto Trading Systems: Pros and Cons

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by Devan Harmon · 4 min read
Automated Crypto Trading Systems: Pros and Cons
Photo: Unsplash

Investors in crypto need to make a conscious decision of whether or not to employ such systems in their overall strategy.

Monthly energy bill payments and self-driving cars are automated, but should crypto investments be as well?

Skepticism looms over the crypto space, as it is unfamiliar territory for some. As for others, they know the space quite well and have spent a large portion of their investment journey harnessing its advantages.

Right now, automated crypto trading is a trending topic that is being explored by beginners and expert investors alike. It is time to look at 3 of the prominent pros and cons of utilizing this method of trading and how it can either be beneficial or potentially hazardous.

Pros of Automated Crypto Trading

Pro #1 Hands-free experience

One benefit of employing automated crypto trading is that it gives the user a hands-free experience. Once the system is initially set up (which takes a matter of minutes), then it just runs continually without user involvement in any shape or form. This advantage is huge for those with daily time restraints or a full plate of responsibilities.

Pro #2 Portfolio management

Automated crypto trading is more than what one would expect. It is a complete overhaul of traditional trading in that it allows for full portfolio management via trade execution, fund allocation, hedge management, and even withdrawals upon request. This method of automation is designed as a white-glove service for both retail and institutional investors.

Pro #3 Exchange-level security

Security is considered a big pro when using automated crypto trading, as the bot is simply software that connects to a high-security exchange. The auto-trading software has no ability to withdraw funds on its own, which does not leave it wide open for hacker attacks. Since the system integrates with major exchanges, the same security principles carry over to the software.

Cons of Automated Crypto Trading

Con #1 Scams

Bad actors exist inside any sector, crypto is no exception. There are some individuals or groups that don’t have investor’s interest at heart, and instead are out to lie, steal, and destroy. Due diligence is a strong suggestion before placing capital into an automated crypto trading system. Never give out a private seed phrase, as no legitimate company will ask for that type of information.

Con #2 Fake promises

Occasionally, a company or project will offer outrageous claims that look quite enticing to the end user. These claims are fake promises that do not hold up their end of the bargain. It could even be an honest company that believes they can deliver, but then don’t. A provable track record is imperative to instill trust in potential investors.

Con #3 Market downturns

The crypto market tends to rise and fall in a matter of moments, creating a frenzy of volatility and sometimes, uncertainty. Some automated crypto trading bots are not equipped to handle harsh fluctuations in the market. Choosing one that can handle those fluctuations is key not only to maintaining your capital but to getting ahead of the game.

Is Automated Crypto Trading a Viable Solution?

The above pros and cons display a concise snapshot of automated crypto trading systems. Investors in crypto need to make a conscious decision of whether or not to employ these systems in their overall strategy.

Automated crypto trading is definitely an up-and-coming niche that is worth looking into. Products such as Stoic AI, an official Binance partner, contains a provable track record of performance. Binance is one of the top exchanges in the world and makes sure to work with companies that look after their users and value security.

In any case, keep an open mind when it comes to automated crypto trading systems. Continue to research, learn, and make the best decisions to positively impact future goals and milestones.

Cryptocurrency News, Guest Posts, News
Julia Sakovich
Author: Devan Harmon

Devan is a crypto trader and Bitcoin enthusiast. He does his best to keep up to date with all the latest trends and innovations in the blockchain industry and likes sharing his expertise.

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