Many aspects of life have been streamlined thanks to the rapid evolution of artificial intelligence (AI). However, always reaffirm your robot’s work and don’t lose sight of your critical thinking skills.
While this technology can be extremely useful, especially when it comes to investing in crypto, experts say there are common pitfalls to avoid.
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“We’re looking forward to seeing you in the future,” said Brian Prince, co-founder and CMO of Xcoins and founder and CEO of Topaitools.com.
He explained that AI can find trends faster and apply them to real-time scenarios. For example, it can be used in roboadvising, allowing you to take a handoff approach to crypto investment. “But there are some pitfalls to be aware of,” he added.
Below are three mistakes to avoid when investing in crypto using AI:
Crypto investments, like other forms of investment, need to be approached in a long-term view, according to Prince. However, he added that AI investment platforms can easily execute high-frequency trading, making it possible to “play the market.”
“I prefer Warren Buffett’s philosophical approach to investments, whether it’s stock or crypto. Don’t buy an investment for a minute that you don’t want to hold for 10 years,” he said.
“It may not be the best strategy, depending on your risk tolerance and financial situation, just because you can try out the market and buy and sell frequently through AI,” Prince added.
Prince also noted that short-term, risky investments help you grow your money faster, but that crypto is highly speculative and unstable. So, don’t invest more than you can afford to lose, especially if you are looking for short-term profits by timing the market with the help of AI.
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Vijay Marolia, founder and chief investment officer of Regal Point Capital Solutions, recommended that you not trust AI for advice. Instead, he suggested that it be used for research, data entry and/or analysis.
“Don’t forget to double-check what sounds crazy or irrational,” Maloria said. “AI uses LLMS (large language models), which tend to form information. These are known as hallucinations in the AI world.”
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