With media flashing news about cryptocurrency and people around us investing in crypto, many of us must have thought of exploring this market but stepped back due to the complications.
The fear is also perfectly understandable as investing in cryptocurrency is not as simple as opening a fixed deposit account. One incorrect step and you can see all your money disappear in front of you. On the other hand, one correct step and you should be able to make significant bucks.
If you want to invest in crypto without manually going through all the processes, investing on autopilot is your best bet. Let’s explore everything you need to know about this investment method.
What does it mean to invest in crypto on Autopilot?
We will begin with a simple analogy that will make things clear even for the uninitiated.
Opposed to crypto, lets take for example regular stock trading. You aim to sell the stock at the highest price while buying it at its lowest. Now instead of manually tracking the movement of a stock through the entire day, what if a bot identifies the lowest and highest points and buys and sells accordingly?
That is what crypto investments on autopilot mean, though it has more layers. To put it straightforwardly, investing on autopilot means signing up for a crypto trading bot that does the work for you. These bots are nothing like the chatbots or other regular bots we come across every day. These are smart bots that have been designed according to an algorithm that makes investment effective. On top of that, these bots are fully automated. You do not need to worry about manually reconfiguring their settings all the time.
Crypto trading bots usually pair with a cryptocurrency exchange to facilitate investments on autopilot. Depending on the exchange, there may or may not be support for multiple bots.
Different ways of investing on Autopilot
Crypto trading bots are the only way to invest in crypto on autopilot, but not all bots are alike. Presently, two types of bots dominate the market, one more than the other.
API crypto trading bots
API refers to Application Program Interface in the world of computer technology. These are interfaces we see around us all the time, in everything from our refrigerators to our cars. At its core, the technology connects you to some device via or software via an interface.
API crypto trading bots are the most common way of investing in crypto on autopilot. All you need to do is grant permission to these bots to access your crypto exchange account details. Once you do that, the trading bot automatically analyzes the market situation and buys and sells accordingly.
Blockchain crypto trading bots
Blockchain is a disruptive technology that has affected every sector of modern human societies. Crypto trading bots that work on the blockchain use something called smart contracts. Smart contracts are pieces of code that execute a given function when all requirements are met. It is a completely automated way of investing in crypto since the requirements of the smart contract trigger all steps by themselves.
Crypto trading bots on the blockchain are still not as prevalent and can only work on the Ethereum network. That’s a major drawback when considering the vast number of opportunities outside the Ethereum blockchain.
How do crypto trading bots work?
Crypto trading bots work via direct communication with your cryptocurrency exchange. All API crypto trading bots first need authorization from the investor to access the user account through API keys.
There are three main stages to the functioning of a crypto trading bot. These are
- signal generator
- risk allocation
We can think of the signal generator as the trader. It makes predictions and calculates profitable trades on the basis of data and analysis markers.
In the risk allocation phase, the trade bot allocates risks via automated parameters of the investor. It's in this phase that you can often fall prey to emotional trading.
The final phase, Execution, includes real buying and selling of digital assets. Every transaction is processed on the basis of multiple signals and inputs. The signals then convert to an API key which the cryptocurrency exchange can read.
A crypto trading bot completes each of these steps on an automated schedule. The trader gets a lot of freedom in configuring the parameters to suit personal investing style.
Why should you invest in crypto on Autopilot?
Investing on autopilot might not be for everyone, but it sure works magic for those who need it. Consider a few cases to understand whether investing on autopilot will work for you.
- Are you interested in cryptocurrency but do not invest due to the fear of losing yourself in the complexities of its jargon? If cryptocurrency makes you nervous or intimidated, you can benefit greatly from automated trading bots and investing on autopilot.
- Do you know the ins and outs of cryptocurrency but do not have the time to do thorough research and invest accordingly? If you fall under this category, investing in autopilot will ensure you stay on track without devoting all your time to studying and analyzing crypto market reports.
- Are you a beginner in cryptocurrency and want to get a hold of things first? If the answer to this question is yes, investing on autopilot is one of the best things you can do. It will ease you into the process of investments without making the process nerve-wracking.
Even beyond these scenarios, many people would benefit from investing in crypto on autopilot. The key is to understand your needs and make sure your automated crypto trading bot follows the same.
What are the benefits of investing in crypto on Autopilot?
Here are a few key benefits of investing on autopilot in cryptocurrencies.
- Saves time: Time is our most precious resource, and investments can be extremely time-consuming. Using an automated trading bot makes sure you have time for all the important things in your life and still invest smartly.
- Offers security: Crypto trading bots are programmed software, and they ensure top-notch security. If you are worried about shady websites and services that promise huge returns on crypto investment, investing on autopilot will keep your money away from these scams and frauds.
- Provides better investment opportunities: Trading bots, unlike humans, are not objects of emotion. You may follow the guides and be confident about your investment strategy. Though manual trading and investing remain an emotional rollercoaster, and lead to many wrong decisions. Investing on autopilot takes out the human element and effectively minimizes any wrong decisions based on whims and emotions.
As you could see, there are many benefits to investing in crypto on autopilot.
Try out this method for yourself and watch your investment game improve in front of your eyes.