Thanks to technology, new avenues are emerging for active cryptocurrency traders to ride them and fulfill their dreams of profit-making and full-time trader life.
As a result of the new Bitcoin Bull-run, more people jump on the crypto trader train again. However, this also has a downside, at least for these new traders. CoinTelegraph’s statistics still show that novice day traders lose their money and get out within 1 year.
These numbers shouldn’t frustrate the latest crypto adventurers who are now eagerly embarking on realizing their dream.
If you’re just creatively looking for ways you can take advantage of the latest technological innovations, this article will be helpful for you.
Here are 3 important tech trends that are ready to change what we know about crypto trading.
1. Decentralized Exchange Trading
Crypto trading is currently dominated by centralized exchanges. However, many raise the important issue that CEXs are centralized, so there is an intermediary in the transaction which is controversial to the philosophy of the blockchain community.
Furthermore, CEXs are often criticized for their safety. Still lives in the memory of many what happened to Mt.gox. This is the most famous hacker attack on the crypto exchange, but several other cases have occurred.
DEXs facilitate peer-to-peer trading by relying on a smart contract, leaving the intermediary out of trading. Because the third party is out of the equation, DEXs do not take custody of customers’ money either. In this way, full control remains with the users, which strengthens security, but also the risk of losing private keys, as without an intermediary there is no one who can do anything about lost keys.
New generation DEXs like Uniswap no longer use an orderbook but liquidity pool protocols to price the assets. Transactions take place between the users’ wallets in a fully P2P nature.
2. AI-driven Automated Trading
Trading algorithms have been with us for a longer time than the crypto market itself, but artificial intelligence (AI) and machine learning (ML) have only recently begun to unfold.
B-cube for example, a France-based company that heavily relies on AI/ML models in their strategies. The AI generates a trading signal which is then executed on the market by a crypto trading bot. The goal is to trade efficiently and automatically without emotions.
Artificial intelligence and its varieties, machine learning, deep learning are gaining popularity in the fields of car manufacturing, online marketing, diagnostics, it was a matter of time before it appeared in crypto trading.
3. Yield farming
Now that we’ve talked about DEXs, it’s time to mention Yield Farming. Also called liquidity mining, Yield Farming is about locking cryptocurrencies for a time period to get certain rewards.
During the process, the so-called liquidity providers (LP) put their funds into a smart contract (liquidity pool) that rewards the LPs with tokens. These rewards are paid from the fees collected by the Decentralized Exchange.
DeFi and Yield Farming gained significant popularity in 2020 which still holds this year.
Now that we’ve taken the major trends, let’s look at how to benefit from them.
Don’t be afraid of the unknown! The world is constantly changing around us, whether we like it or not. Humans are by nature distrustful of novelties. But if we can’t stop the wheel of the time anyway, why not go after them and see what they can offer?
Be open to new opportunities. Successful people all went through many failures before reaching their goals. Thomas Edison had amassed 1,000 unsuccessful attempts before inventing the light bulb. How could he have done this, if he hasn’t always been open to a new vision that either succeeds or fails? Keep your journey, don’t give up and learn from your mistakes!
Do your homework. We have listed the most important trends and opportunities in the crypto tech space. Was that enough to let everyone know about these, including the risks inherent in them? No way. Surely there is no reward without risk and it always remains true. Be open, but also be careful!
Remember it! A city is never built alone or overnight.
The information provided in this article does not constitute investment advice, financial advice, trading advice, or any other sort of advice and you should not treat any of the article’s content as such. Author, website or the company associated with them does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.