Automated Trading Bot

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Automated Trading Bot

Our Bot Copies the Trade & Manages for You

The bot will automatically enter the trade for you without doing anything

We enter the stop loss, profit targets, entry orders and everything. If targets are hit, we will move stop loss automatically. If the trader cancels a trade, we do that all for you. We have a full time team and chat room members are discussing the bot and our staff and developers are intervening with trades as needed.

Best Bitcoin Trading Bots in 2020 – Automated Cryptocurrency Trading Guide (April 2020 Update)

Cryptocurrency trading isn’t easy. However, there are many people who have honed the art of trading bitcoins and altcoins on a daily basis. Trading bots are used by many cryptocurrency traders to execute trades faster and more efficiently, and sometimes even in their sleep. This is a comprehensive crypto trading bots review where we examine all pros & cons of top 15 automated trading platforms on the market.

What are Trading Bots?

Trading bots are software programs that connect to an exchange (usually via API protocol) and make trades on behalf of the users. They work using a variety of trading indicators and strategies. Since trading is all about mathematics and fast complex probability calculations, bots should be better at trading than humans.

The bots make trading decisions by following the market’s price changes and reacting according to a set of predefined and pre-programmed rules. Typically, a crypto trading bot will follow and analyze technical indicators and signals such as volume, orders, price, and time. Most of the more advanced bots can be customized to execute your own trading strategy so they are great if you know what you are doing.

Traditional markets also have algorithms and bots that are, however, not accessible to regular mortals as they are super complex and cost a fortune.

That is not the case in cryptocurrency markets as you will see and read below.

Top Bitcoin and Altcoin Trading Bots

This article is very long and if you need a quick solution and recommendation, these three trading bots have proven to be on top of the game when it comes to automated trading.

Cryptohopper Margin.de Bitsgap
Integrations Binance
Binance US
Bitfinex
Bittrex
CEX.io
Coinbase Pro
Cobinhood
Cryptopia
HitBTC
Huobi
Kraken
KuCoin
Poloniex
Bittrex
Bitfinex
Binance
Bitstamp
Bluetrade
Kucoin
Poloniex
HitBTC
CEX.io
Coinbase Pro
OKex
Huobi
OkCoin
Kraken
LAToken
Bittrex
Bitfinex
Binance
Bitstamp
Coinbene
Kucoin
Poloniex
HitBTC
CEX.io
Coinbase Pro
OKex
Huobi
OkCoin
Kraken
Liquid + 10 other
Price From $19 Month $129 lifetime $19 per Month
Type Cloud Local Cloud
External Signals Yes Yes Yes
Review Read Read Read
Visit Visit (use code
“Discount10”
to get 10% off)
Visit

Below is a tabular overview of all notable altcoin trading bots on the market, most of them are described in more detail in the second part of the article.

Name Price Supported Exchanges
Cryptohopper $19 to $99 per month 12
Bitsgap $19 to $109 per month 25
Margin.de (“Discount10” for 10% off) $129 to $2999 one time fee 25
Trade Santa Free to $100/month 4
Gunbot $260 to $1,961 one-time 10
ZenBot Free 9
Haasbot $475 to $1,360 per year 7
Gekko Free 7
Autonio $50 per month 2
Kryll Free to 20,000 KRL (

$1,400) 4 Zignaly Free (Beta Version) 5 HodlBot Free to $10/month 2 3Commas $30 to $100 per month 23 (only 9 support automated trading) CryptoTrader $16.50 to $199 per month 9 BTCRobot $19.99 to $39.99 per month or $399 one-time 2

Types of Trading Bot Strategies

Arbitrage

In the early days of cryptocurrency trading one of the primary strategies that traders used to make profits was arbitrage – i.e. buying assets in one market and then selling them in another for a higher price, thus earning profit on the difference. As cryptocurrency exchanges were decentralized, there were often large differentials between prices offered on various exchanges, meaning that profits could be made through arbitrage.

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On CoinMarketCap there are currently 208 crypto exchanges listed, where exchanges with no fees are excluded. When no fees are being charged at the exchange, it is possible for a trader (or bot) to trade back and forth with themselves and generate a lot of “fake” volume without penalty. It’s impossible to determine how much of the volume is fake so they excluded it entirely from the calculations.

Due to the large number of exchanges and high volatily of cryptocurrencies, traders can take advantage in the form of arbitrage.

An arbitrage is the possibility of a risk-free profit after transaction costs. For example, an arbitrage is present when there is the opportunity to instantaneously buy something for a low price and sell it for a higher price. People who engage in arbitrage are called arbitrageurs, such as a bank or brokerage firm. The term is mainly applied to trading in financial instruments, such as bonds, stocks, derivatives, commodities and currencies.

With so many exchanges available, there could be the same asset but with different price on different exchange. For instance, the price of an asset A on exchange 1 is 10$, while on exchange 2 it is 15$.

Although the spread between crypto markets are getting smaller by day, they do still exist and trading bots can assist traders in making the most of these differentials.

Market Making

Trading bots can also enable users to use the market making strategy. Market making is an activity whereby a trader simultaneously provides liquidity to both buyers and sellers in a financial market. Liquidity is the degree to which an asset can be quickly bought or sold without notably affecting the stability of its price. Market makers “make a market” by quoting prices to both buy and sell an asset. In this way, the market maker (or liquidity provider) acts as both a buyer and seller of last resort where there would not naturally be another buyer or seller, thereby providing liquidity.

As prices oscillate and vary, the trading bot will automatically and continuously place limit orders in order to profit from the spread.

This strategy does not work good in low liquidity environments and is a highly competitive.

Do Cryptocurrency Trading Bots Work?

The main purpose of trading bots is to automate things which are either too complex, time consuming, or difficult for users to carry out manually.

Good trading bots can save a trader time and money by collecting data faster, placing orders faster and calculating next moves faster.

Majority of trading bots use an indicator from technical analysis called an exponential moving average (EMA) as a principle strategy for analyzing the market. Bots can be programmed to make an action once EMA surges or drops certain thresholds.

By setting up the bots, users can set their thresholds to fit with their risk profile. However, one of the main downsides of EMA and similar indicators is that they are so called lagging indicators – based on past history, which, as all traders will know, is not indicative of future performance, especially in the cryptocurrency industry where volatility is rife.

Therefore the answer to the question of whether trading bots work is – “depends”. They do work, but not necessarily for everybody.

Trading with automated crypto trading bots is a technique that uses pre-programmed software that analyzes market actions, such as volume, orders, price, and time, and they are rather common in the bitcoin world, because very few traders have time to stare at the charts all day. Bots or program trading is used within many global stock exchanges.

Most people trade bitcoin as a way to generate passive income while working their regular day jobs, and bitcoin trading bots are said to establish more efficient trading. There are controversial automatic Bitcoin trading bots like Cryptosoft, and there are crypto trading bots that can be downloaded online, and there are also trading bot services like you have to pay for, offered by various trading engine and programming companies.

Trading bots are software programs that connect to an exchange (usually via API protocol) and make trades on behalf of the users. They work using a variety of trading indicators and strategies. Since trading is all about mathematics and fast complex probability calculations, bots should be better at trading than humans.

Bitcoin trading bots can be utilized on many well-known cryptocurrency exchanges today. There are crypto bots that are free of charge and can be downloaded online, and there are also trading bot services you have to pay for, offered by various trading engine and programming companies.

According to InsideBitcoins, there are also the robots that have been claimed to be endorsed by celebrities like Bitcoin Trader. Remember though, not every robot is what it claims to be. Beware of Scams.

With so many people relying on crypto trading bots, the question becomes which one should be avoided and which one can be trusted. Below is a list of best cryptocurrency trading bots.

Is there a difference between bitcoin and ethereum trading bots?

No, it is just semantics. These bots can be called best Ethereum bots as well or best [pick any altcoin] trading bots since they support automated trading of any coin listed on the exchanges they integrate with.

Best crypto trading bots

We have made our list of top trading bots based on the following criteria:

  • Trading strategy.
    What strategies of technical analysis can the bot execute? How customizable are those strategies?
  • User Interface.
    Friendly user interface is another important factor. The bot has to have simple and intuitive processes that are easy to learn and implement.
  • Ease of use
    If you are a beginner, the crypto bot needs to have premade setups that are easy to choose and launch. For the more advanced users, ability to customize the crypto bot to the settings and preferences user has was of highest importance.
    Speed.
    What is the latency in transferring data from exchanges? Sometimes it is important to have the order be executed immediately and a slow bot can cost you a lot of money.
  • Cost.
    Of course, price always plays a role. You want to earn money, after all, and not break a bank for a piece of code.
  • Security.
    Authentication methods, 2 Factor authentication, API key encryption mechanism. Privacy policies related to users trading data.
  • Reputation.
    Does the bot have a good reputation among the wider crypto community? Check online forums for reviews from other users to see if the crypto bot is legit and if they’d recommend using it.
  • Exchanges.
    While most reputable crypto bots will work with most reputable exchanges, make sure any program you choose will allow you to trade on the exchange(s) you want to use.

Cryptohopper

Cryptohopper is a crypto trading bot that offers some unique and interesting features, including cloud trading, some social trading options and a large variety of coins/exchanges to trade on/with. Stop losses and trailing stops are especially welcome elements here, as they help you tremendously with risk management. As with any trading bot, you’ll find conflicting reports regarding its effectiveness, functionality and safety.

Created by two brothers from the Netherlands, one a day trader, and the other a web developer, this trading bot can brag about having a perfect blend of experience and knowledge – both in the worlds of trading/technology – behind it from the start. The two merged their ideas, skills, and experiences and created Cryptohopper.

It currently offers integration with the following crypto exchanges:

Work is apparently being done to integrate the cryptocurrency trading bot with other well known crypto platforms like HitBTC, Cobinhood, Cex.io, Bitstamp and bitFlyer APIs.

Cryptohopper is different than most of the market competitors in the sense that it’s web-based; it’s stored on the company’s servers, operates on a cloud-like infrastructure and can be accessed through any web browser. While the advantages of this include fast and simple access to the crypto bot, without needing any additional hardware to set it up and keep online.

Bitsgap

Bitsgap is a new young startup from Estonia that built a powerful cryptocurrency trading terminal that plans to rock the boat of the established incumbents.

The number of supported exchanges is impressive – 25. This fact also means more arbitrage opportunities since there are a lot of exchanges that are tracked and hence there is a high probability of finding a big price difference between them.

So Bitgsap is a platform that supports trading, portfolio tracking, arbitrage, signals, bots – a full spectrum of cryptocurrency service that can be managed from one dashboard.

Of course, Bitsgap also has a demo version that you can take for a test ride and try out all your strategies without risking real money.

Prices are around what competitors charge – $19 for the lowest package and $109 for the advanced account that offers 15 bots and has no limit on the amount of funds you can trade.

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Coinrule.io

Coinrule stands out among competitors with its If-This-Then-That rule logic. This approach allows even less advanced traders to build their trading strategy in minutes. The user-friendly interface guides users in developing the trading bot step-by-step.

Over 150 templates help beginners in finding the perfect trading strategy that suits their needs. The platform allows plenty of different trading strategies, including stop loss and take profit in one and integrates the most common technical indicators such as Moving Averages.

Another exciting feature is the built-in Demo exchange. Traders can test their trading system in a safe environment with a virtual allocation of coins. The Demo exchange is modelled entirely on Binance and you can try your strategies risk-free.

You can use Coinrule on a free plan with some limitations or subscribe to one of the premium plans priced between $29.99 and $249 USD. With a yearly subscription, you get access to a 20% discount on the price.

Coinrule supports Coinbase Pro, Binance, Binance US, Bitstamp, Kraken, HitBtc, Bitpanda Pro, Okex, Liquid, Poloniex and additional exchanges are added regularly.

Margin.de

Margin (Use code “Discount10” to get 10% off) is a trade bot that has 17 supported exchanges, 2 new crypto trading bots, and great features like a profit/loss indicator, market scanner, social integrations & more. Plus, they still offer the free demo to try everything out first!

Use code “Discount10” to get 10% off on the checkout!

Margin currently comes bundled with two trading strategy bots:

• Ping Pong Strategy

• Margin Maker Strategy

Just as the name suggest, the ping pong strategy allows you set a buy and sell price and the bot will do the rest. The mArgin maker strategy is a bit more advanced and can buy and sell based on price action adjusting with the course direction of the market.

They obviously have a good designer on their team as their GUI is by far the best looking out of all bots and has lots of customization options.

Prices are paid for lifetime licenses and range from $129 for starter package over $259 for standard to whopping $2999 (but these are aimed at enterprise clients).

One drawback is that it is not a cloud-based software, rather a downloadable progmram that you run from your local machine.

If you want to find out more, here is our full Margin bot review.

(Use code “Discount10” to get 10% off)

Deep TradeBot

DeepTradeBot gives traders an opportunity to use AI features that make crypto-trading more efficient while one can afford to spend less time for trading. The entire solution has been built to be easy to use.

Deep TradeBot functionality is based on strong machine learning, and neural networks increased by the power of cloud computing and BigData technological innovations.

The solution works with Bittrex, Exmo, Kraken, Binance, Bitfinex and Huobi cryptocurrency exchanges, and gives an opportunity to rent one of 4 trading robots available:

  • MiniBot 5 NFS/Free Bot
  • StandartBot 10 NFS/$10 USD
  • ProBot 15 NFS/$25 USD
  • NetPremium 40 NFS/$45 USD

DeepTradeBot AI robots have multiple trade modes

Each trading mode is activated at the perfect time, and this allows them to keep on the top whatever the current market situation is.

The main 4 methods used by bots are the following:

  • High frequency trading
  • Arbitrage trading
  • Algorithmic trading based on technical indicators
  • Fundamental analysis based trading

Top 3 main advantages of DeepTradeBot

High Winrate

Usually it will take a minimum of 1 sec. to send out a signal via API (what the other robots usually do). During this time, the Winrate is reduced by almost 40%. The key to having an increased Winrate rating for deepTradeBot – is to receive trading indicators straight from the exchange server;

Easy UI

The only thing you need would be to rent a bot and refill its trade balance;.

Low commissions

A huge trading volume on exchanges gives us a chance to reach reduced trading commission fees: the greater the trading volume is, the less the commission on top rated trading platforms.

Every bot has its own rental terms, minimal and maximal day-to-day revenue range, trading pairs and so forth. The crypto-currencies available to trade for now are Bitcoin, Litecoin, Ethereum and Dogecoin.

Zignaly

Zignaly is another crypto bot that is cloud based and since recently also offers additional service of crypto signals.

It is handicapped to the leading platforms in the number of exchanges it supports – right now it only works with Binance, Kucoin, BitMex, Poloniex and Bittrex with a promise of addition of new exchanges in the near future.

With Zignaly crypto signals you can manage the Buy / Sell signals from external integrated signals providers like Mining Hamster Signals or Crypto Quality Signals.

It works well with TradingView as you can send your own signals from TradingView by using indicators or their “Cryptocurrency Signal Finder” recommendations.

It also has a trailing stop loss option, a feature that is evolving into a must-have for all trading platforms, especially automated software like Zignaly.

Just like other bots from this list, Zignaly works via API keys, has no ability to withdraw your coins and all activity is done directly on the exchanges and not routed through their servers – meaning, the bot is as safe as it gets.

As for the prices – it currently has only one package of $15.99 as they still consider themselves in beta mode. You can also do a DEMO for 30 free days before buying the subscription.

3Commas

3Commas is one of the most well-known trading bots in the market. The name referencing the billion-dollar club is a Russian made software solution.

3Commas is a crypto trading terminal which features bot trading and portfolio management. It features a SmartTrade terminal which allows users to execute orders and trades, set bot-trading and stop-loss/profit positions.

Their plans range in pricing from $22 to $75 per month.

Binance, CEX.io, Coinbase Pro, Bittrex, BitMEX, Poloniex, YoBit.net, KuCoin, Bitfinex, OKEX, HitBTC, Huobi Global, Bitstamp, Cryptopia.

You can read our head-to-head comparison of 3Commas vs Cryptohopper to see how well it fares against the top dog of crypto bots. As for the full 3Commas review, you can read it here.

Haasbot

Haasbot algorithmic trading software was created In January 2020 by Haasonline. This crypto trading bot is very popular among crypto enthusiasts and trades bitcoin and over 500 altcoins on many major crypto exchanges, including fully automated trades on platforms such as Kraken, BTCC, GDAX, Poloniex, Bitfinex, Gemini, Huobi and many more.

On paper, this cryptocurrency trading bot does all of the trading legwork on behalf of the user. However, some input is required. Haasbot bot is highly customizable and enables a variety of technical indicators, and is also capable of recognizing candlestick patterns. One has to be knowledgeable to use this trading bot and make a profit from doing so, considering it costs between 0.12 BTC and 0.32 BTC per three-month period to use this tool. There is, however, an extensive knowledge base for the traders willing to learn, provided by the creators on their site.

Gunbot

Gunbot is an older crypto trading bot but still one of the more advanced ones that provides a wide range of settings and strategies which are ideal for both beginners and professionals. It is used to take over (most) of the workload of traders on the cryptocurrency markets.

The cryptocurrency trading bot gives users the opportunity to customize their trading to a level which no other trading bot can provide. Almost all the strategies and technical indicators that manual traders use on a daily basis can be found in this bot and used to trade automatically. The interface is user friendly so that everyone can easily get a hang of it. It is suited for more experienced crypto traders as well as beginners; some strategies are highly configurable while others are easier to use.

The program comes with tons of trading strategies that are highly configurable and includes different types of insurances to optimize your crypto trading which are explained on the website.

Another positive feature about this crypto bot is that it’s a one-time payment, that means: no need to renew every month (pay once and get all the future updates for free)!

Don’t want the trading bot anymore? Don’t worry, Gunbot includes something that no other trading platform offers: Gunthy coin. Gunthy coin is a feature that no other trading platform offers, a cryptocurrency token that is offered to the users when buying the the bot. The amount of tokens sent to the buyer are derived from the type of license that they acquire. Why is this important? Imagine that trading is nothing for you and that you want to sell your crypto bot, that’s possible with the Gunthy token!

Gunbot is used by thousands of crypto traders daily which creates a close and helpful community. Its community is highly active on social media platforms to discuss different trading strategies and help each other out. The trading platform provides different packages which can be upgraded if needed. There are 4 different licenses available, ranging from 0.04 BTC to 0.3 BTC.

CryptoTrader

CryptoTrader is less known cryptocurrency trading bot that is gaining popularity. This cloud-based automated cryptocurrency trading bot claims to allow users to build algorithmic trading programs in minutes. Not having to install unknown software is a big plus. However, it remains to be seen if this platform is legitimate. One intriguing feature is that the company also offers a “Strategy Marketplace” where users can buy and sell trading strategies.

Click here to read full CryptoTrader review!

All major crypto-currency exchanges, such as Coinbase, BTCe, Bitstamp, and more, are supported for both backtesting and live trading. Using their backtesting tool, you can see how your trading strategy would work over different market condition. Their goal is to provide traders with cloud-based automated trading solutions powered by cutting-edge technology, and the company states that its automated trading bots in are unique compared to the current crypto trading bots on the market today.

Revenuebot

RevenueBot is a cloud-based cryptocurrency trading bot designed for making money while trading in top exchanges. An automatic martingale-based trading system is carried out around the clock. There is no subscription fee, the service only takes a percentage of the profit received from trading.

Supported exchanges are Binance, DSX, Exmo, Livecoin, Okex, HitBTC, and other major cryptocurrency trading platforms. RevenueBot is an attractive service for passive earnings which doesn’t take a lot of your time.

RevenueBot is most suitable for careful trading and eliminating big risks, and with the right settings brings in a steady income of 0.2 to 0.7% of the deposit per day. It does not take much time to monitor its work either.

Bot trading is safe, as the users’ funds are kept in their accounts on exchanges. RevenueBot does not take, does not keep, and does not have access to fund withdrawal.

RevenueBot fee is calculated using the earned profit and is equal to 20%. This is beneficial for customers with small deposit. The maximum commission is only 50 USD (per month) in BTC equivalent, which is also beneficial for customers with a large deposit. The fee is deducted from the internal RevenueBot account. And you can replenish the account balance for any amount you choose.

The bitcoin bot has a lot of settings, each is described in detail in the FAQ (https://revenuebot.io/faq.html), and technical support is always ready to help you and find the right trading strategy for you.

Coinbot.club

Coinbot.club is a crypto bot rental service with an open source code. On the site you can find the description of algorithms and link to the github(https://github.com/coinbitbot).

The project has got a number of features that distinguishes it from others:

1. This is a cloud-based service that does not require any programs to be installed.

2. The project also presents information on the team and its other projects

3. Open source code and link to the github – anyone can check the code and algorithms of the automated trading bots.

4. Additional modules for cryptocurrency traders (arbitrage, social and telegram assistant)

5. Affiliate program up to 50% 6. 3 types of automatic trading bots (aggressive, balanced and conservative)

There are three additional modules:

1. A social analyzer that searches and sends information to the user about upcoming airdrop, hardfork, re-branding, and so on. The user can customize the keyword dictionary on his own. It is based on the research conducted by the team, which confirms the influence of news on the crypto rates.

2. The second tool is an arbitration bot, which not only checks the arbitrage windows, but also checks whether the deposit and withdraw of currencies are available at the moment. It is an important point because the majority of trading bots do not verify it.

Another important detail is the ability to set the desired volume of arbitration. This means the arbitrage bot will not only take the first best orders from the order book, but will analyze their depth and calculate what kind of profits will be received on a specific volume. This is a very useful and rare feature.

3. Telegram assistant. For convenience, the project team has developed a telegram assistant that allows you to fully manage all the bots. According to price, it is relatively low and accounts for 0.25% of all trades. On the site you can learn about the history of bids and general statistics on bots.

Free crypto trading bots

Gekko

Gekko is a Bitcoin trading bot and backtesting platform that supports 18 different Bitcoin exchanges (including Bitfinex, Bitstamp and Poloniex). Gekko is free and 100% open source that can be found on the GitHub platform.

This automated trading bot even comes with some basic trading strategies, so using it seems rather straightforward.

Gekko comes with a webinterface that was written from scratch. It allows you monitor your local data, strategies. It can also run backtests and visualize the results. Using plugins, which are available for IRC, telegram, email and a lot of other platforms, Gekko is able to update you wherever you are! Gekko runs flawlessly on all major operating systems (Windows, macOS, and Linux).

You can also run it in the cloud or on your raspberry PI without any issues! It will not exploit arbitrage opportunities, nor is it a high-frequency trading bot by any means. With a good list of supported cryptocurrency exchanges, Gekko is definitely a bitcoin trading bot that is worth checking out.

Zenbot

Zenbot is another open-source trade bot for bitcoin traders. It is important to note that this trading bot has not seen any major updates over the past few months. However, it is available to download and modify the code if needed. This marks the third iteration of Zenbot, which is still a lightweight and artificially intelligent bitcoin trading bot, and it is also one of the very few solutions capable of high-frequency automated crypto trading and supporting multiple assets at the same time.

This bot supports following crypto markets – Gemini, Quadriga, Bittrex, Kraken, Poloniex, and GDAX. Work on further exchange support is ongoing. According to the GitHub page, Zenbot 3.5.15 makes a 1.531 ROI in just three months. This is quite surprising.

Should you use a crypto trading bot?

Cryptocurrencies are a nascent and atypical asset class and for this reason it is hard to make a regular return off of them in the same way that cash or a stock create value. Many of the best stocks pay out dividends which is in addition to price appreciation main wealth creation mechanism from them. There isn’t really an analogue for this in the crypto market, unless crypto owners lease out their cryptos to derive an income from their holdings.

Or you can hoard staking coins and participate in the network maintenance as a block producer or at least, delegate voter.

Trading bots represent the other option for passive income earning in crypto industry – even though, as we emphasized earlier, they are not completely hands off and to require monitoring and manual interventions.

Trading Bots For Passive Income

If you want to put your crypto coins to work for you, trading bots could make sense to use.

The ‘bot’ is superior to a human because it is emotionless and it is awake and looking for income opportunities 24/7. Of course, there is no such thing as free money.

Any risk that can generate a return has the potential to lose money. It is a good idea to make sure that any automated investment platform you choose to trust with your cryptos can prove that it works with a verifiable transaction history.

Bot trading is absolutely legal in cryptocurrency markets but also in the stock market (although not all brokers allow the use of such software).

Yes, they really do work. However, you do need a certain level of knowledge to set them up and it is not, as often marketed, a hands off money making machine. You need to monitor their performance, especially in times of high volatility – sometimes even to turn them off to prevent profit losses.

Yes, there really are free crypto bots that work – Gekko and Zenbot are two most known free bitcoin bots. They are completely free and safe to use and people do make money by using them.

Beginner’s Guide to Bitcoin & Crypto Trading Bots

Unlike the stock markets, the cryptocurrency market never closes and never sleeps, which can be a highly stressful scenario for traders and even casual investors in the industry.

Users familiar with crypto investment will also be familiar with the (joyful or sinking) feeling of waking up in the morning to be greeted by a pleasant or unpleasant surprise when they check their portfolio and see large gains or losses.

As a result of the volatility of the market, trading bots have become increasingly popular among traders by allowing them to remain in control of their trading at all times, with the bot not sleeping even while the trader is. In addition, a correctly specified bot allows trades to be executed faster and more efficiently than the trader would be able to do manually.

The explosion of popularity in cryptocurrency has also resulted in a big increase in the number of crypto trading bots available, either for free from open-source platforms or licensed to users in exchange for flat fees.

However, it is difficult to ascertain which of them work as intended and which of them are an absolute waste of time. This post will consider the background to what exactly trading bots are and whether they work for Bitcoin trading (and more importantly, for your Bitcoin trading). It will then consider some of the best trading bots in the market today.

Top Trading Bots

If you are in a hurry, here’s our pick of the top 2 bot platforms on the market right now.

Cryptohopper 3Commas
Integrations
Binance
Bitfinex
Bittrex
CEX.io
Coinbase Pro
Cobinhood
Cryptopia
HitBTC
Huobi
Kraken
KuCoin
Poloniex
Integrations
Bittrex
Bitfinex
Binance
Bitstamp
Kucoin
Poloniex
HitBTC
CEX.io
Coinbase Pro
OKex
Huobi
Yobit
GDAX
Price From
$19 Month
Price From
$24 Month
Software Type
Cloud-Based
Software Type
Cloud-Based
External Signals
Yes
External Signals
Yes
Review
Read
Review
Read
Visit Visit

What are Trading Bots?

In essence, a trading bot is a software program that interacts directly with financial exchanges (often using API’s to obtain and interpret relevant information) and places buy or sell orders on your behalf depending on the interpretation of the market data.

The bots make these decisions by monitoring the market’s price movement and reacting according to a set of predefined and pre-programmed rules. Typically, a trading bot will analyze market actions, such as volume, orders, price, and time, although they can generally be programmed to suit your own tastes and preferences.

Trading bots have been popular for many years in various conventional financial markets. However, trading bots have not been traditionally available to the average investor as they cost a significant amount of money.

For example, a Bloomberg terminal can often cost in excess of $10k. However, due to the transparent nature of blockchain, cryptocurrency exchanges tend to grant their customers direct market access that provides users with the opportunity to analyze the exchange’s electronic order book, which was a type of access that was traditionally exclusively available to brokers and investment houses in conventional financial markets.

With many people trading Bitcoin passively and therefore unable to dedicate large amounts of time to analyze the market, the intention is that Bitcoin bots will allow users to establish more efficient trading without having to keep on top of the market at all times.

Types of Trading Bot Strategies

Although the cryptocurrency market is much less mature than other financial markets, the digital nature of the market has meant that despite the fact that it has had significantly less time to integrate algorithmic trading, the technology has not been slow in catching up on its rivals in terms of providing a trading bot service, allowing for investors to obtain access to a wide range of trading strategies, some of the most popular of which are considered below:

Arbitrage

In the early days of cryptocurrency trading one of the primary strategies that traders used to make profits was arbitrage – i.e. buying assets in one market and then selling them in another for a higher price, thus earning profit on the difference. As cryptocurrency exchanges were decentralized, there were often large differentials between prices offered on various exchanges, meaning that profits could be made through arbitrage.

Although the spread between exchanges are much smaller now, they do still appear from time to time and trading bots can assist users in making the most of these differentials. In addition, arbitrage can also be utilized in traders looking to involve futures contracts in their trading strategies by benefiting from any difference that exists between a futures contract and its underlying asset, by considering futures contracts that are traded on various different exchanges.

Market Making

Trading bots can also allow investors to use the market making strategy. This strategy provides for “continuous buy and sell prices on a variety of spot digital currencies and digital currency derivatives contracts” in an effort to “capture the spread between the buy and sell price”.

In order to carry out the market making strategies, in involves making both buy and sell limit orders near the existing market place. As prices fluctuate, the trading bot will automatically and continuously place limit orders in order to profit from the spread.

Although this may be profitable at certain periods, the intense competition around this strategy can result in it being unprofitable, especially in low liquidity environments.

Do Trading Bots Work?

Trading bots work by reacting to the market. It gathers the data it needs in order to execute a trade based on analysis of the trading platform. However, with cryptocurrency, the trading platform only tells half of the story, with many rises and falls being based on other sources (such as John McAfee’s Twitter or other online rumors!) that cannot be programmed into the bot for analysis.

In addition, as noted above, the spread between the exchanges has flattened somewhat, meaning that the opportunities for inter-exchange arbitrage are much lower than in previous years.

Many trading bots use what is known as an exponential moving average (EMA) as a starting point for analyzing the market. EMA’s track market prices over a set time period, and bots can be programmed to react to what that price does – such as moving beyond certain thresholds.

By programming the bots, traders can set their thresholds to correspond with their risk appetites. However, one of the downsides of EMA is that it is based on past history, which, as all traders will know, is not indicative of future performance, especially in the cryptocurrency industry where volatility is rife. Therefore the question of whether trading bots work is a multi-faceted one in which the problem answer is that they work, but not necessarily for everybody.

Trading bots offer a variety of advantages, including having constant interaction with the market, as well as the not-insubstantial factor of removing the emotion from trading. However, on the other hand, by using the wrong trading strategy or relying on the trading strategy of others, a trading bot could simply end up automating a set of poor market trading decisions.

Best Crypto Trading Bots

In this section we will take a look at some of the popular and publicly-available bots you can use. In most cases these bots will offer more than automated trading. Some of the platforms give clients advanced trading tools, as well as access to numerous crypto exchanges.

Cryptohopper

Cryptohopper is one of the most established players in the auto trading scene for several reasons. Firstly, they run entirely on the cloud, so no installation is required making 24/h trading possible. They also have an incredibly intuitive dashboard, and only require a 5 minute set up to start trading.

Next to this they are the only bot to embed external signalers, allowing new traders to subscribe to a growing list of professional analysts from around the world. Many use machine learning, intelligent algorithms and employ teams of mathematicians to target rising coins. Signals are sent directly to the users bots which buy and sell when they receive them.

Signaler dashboard where you can subscribe

The bot allows you to take advantage of bull markets with a trailing stop-loss, and has full technical analysis features from Stoch and RSI to Bollinger Bands and MACD.

Cryptohopper has a very nice modern dashboard area where you can configure and monitor everything and comes with a config wizard or pre-created templates for the popular exchanges – Binance, Bittrex, Poloniex, GDAX and Kraken.

Traders with more experience can incorporate their favorite technical indicators, triggers and use tools that are handy in bear markets, such as DCA & shorting features.

Unlike many other bots, Cryptohopper does not charge any trading fees, and is one of the few bots to offer a free trial for a month with the ability to upgrade to Bunny ($19 p/m), Hare ($49 p/m) and Kangaroo ($99 p/m).

We have completed an Indepth Review of Cryptohopper here.

3Commas

3Commas is a popular trading bot which works with a number of exchanges including Bittrex, BitFinex, Binance, Bitstamp, KuCoin, Poloniex, GDAX, Cryptopia, Huobi and YOBIT. The bot works 24 / 7 with any device as it is a web-based service so you can monitor your trading dashboard on mobile as well as desktop and laptop computers.

It allows you to set stop-loss and take-profit targets and also has a social trading aspect which allows you to copy the actions of it’s most successful traders.

Another interesting feature is it’s ETF-Like crypto portfolio feature which allows you to Create, analyze and back-test a crypto portfolio and Choose from the best performing portfolios created by others.

We have completed an Indepth Review of 3commas here.

CryptoTrader

The CryptoTrader bot is a cloud based trading bot that provides users with fully automated trading solutions while not requiring them to install the bot on their own system. CryptoTrader features a strategies ‘marketplace’ that allows users to buy their favorite trading strategy, or alternatively to sell strategies developed by themselves.

Cryptotrader supports most of the major exchanges for both backtesting and live trading, with the backtesting tool allowing users to review how their strategies would work under different market conditions.

CryptoTrader offers five different subscription plans, with fees ranging from 0.006 BTC to 0.087 BTC per month (Bitcoin is the only payment method accepted). The separate packages include a number of differences, including the number of bots operating on the user’s behalf as well as the maximum equity limit.

Although though some knowledge of coding is beneficial when setting up strategies in the CryptoTrader bot, there are a number of free and paid strategies available for users that are not experienced / interested in coding.

The CryptoTrader bot also has a wide level of interoperability, with the service offering email and text notifications to alert users on important market events or changes in trends.

Haasbot

Created in 2020 by Haasonline, Haasbot trades Bitcoin and many other altcoins,

Although Haasbot is probably the most complete of the trading bots that are currently available, doing much of the labour with relatively minimal input required from the user, in order to provide this service it is pretty expensive, with costs ranging from between 0.04 BTC and 0.07 BTC for a three-month period.

At those prices, it is clear that anybody willing to take a chance on it should be knowledgeable about what they expect to get out of the platform and be committed to doing so.

Haasbot is an outgrowth of HaasOnline Software, which was started by Stephan de Haas in the 1990’s. The same company is also behind HaasOnline Trade Server (HTS), which is a automated system that is designed to trade cryptocurrencies.

The Haasbot platform operates on Windows, MacOS, and Linux, and allows traders to choose from more than 10 different ‘bots’. The more you decide to spend, the more bots you will have access to on the platform.

Given the prices involved in using the bots, it is a good idea to do some research on the returns they have generated in the past.

Read our Indepth Review of HaasBot here.

Zignaly

Zignaly is a trading terminal with cryptocurrency trading bots that lets you trade automatically with help from external crypto signal providers. For the moment the platform costs just $12 per month.

The platform is incredibly easy to use and can be utilized as a passive income machine. Zignaly lets you easily connect with a TradingView account, so you can use it with your favorite indicators. Alternatively, you can use the Zignaly trading terminal to create your full strategy at once.

Because Zignaly is still pre-launch, the number of exchanges that it operates with is limited. The development team says that once the full version is live, KuCoin, Coinbase Pro, Poloniex and Bittrex will be added to the platform. The company also plans to offer its clients unlimited currency pairs without any additional cost.

One of the nicest things about Zignaly, besides the price, is the developers’ commitment to transparency. The full development teams’ info is available online, and anyone who wants to learn more about the founders can find their personal information on their social media profiles.

Read our Indepth Review of Zignaly here.

Cap.Club

Cap.Club is a simple way to gain access to advanced trading features. The platform was designed in Russia, and currently works on Binance and Bittrex. The platform offers traders automated buying and selling algos, as well as advanced order types.

One of the first things that you will probably notice about Cap.Club is the simplicity of both its website and interface. If you are just getting into automated trading, or have little coding knowledge, this simplicity could be a big plus for you.

The platform comes in two versions.

The free version will give you all of the trading strategies that the full platform features, but you will be limited in how many can run at once. The free account is also limited in communication. The full version will send you alerts via both Email and Telegram, but the free one is only going to contact you with Email.

If you want to use the platform for free, it is ready to go. For those that want to upgrade, it currently costs $30 USD per month, or can also be bought on a yearly basis for a discounted price of $300 USD.

Simple to Use, Lots of High-End Features

Don’t let the simplicity of Cap.Club’s interface fool you, it delivers some high-end trading tools. In addition to limit and trailing orders, Cap.Club offers it users three trading programs:

  • Smart Sell (long)
  • Smart Buy-Sell (long)
  • Smart Sell-Buy (short)

These algos seek to make money automatically for Cap.Club’s clients. There aren’t a ton of reviews out there for how effective the algos are, but they are all 100% free to use with the basic package.

The platform that Cap.Club put together offers a lot of value, and also is a nice compromise between an algo-driven trading platform, and a trading platform that gives you some of the normal trading tools that are lacking on most crypto exchanges.

Cap.Club also includes a visual strategy editor with both the free, and premium package. If you understand how trading strategies work, but can’t put them into code, a visual strategy editor could be a good fit for you.

Instead of having to write your own algo in code, you can use a visual strategy editor to lay it out with symbols. Once you have the strategy together, it is simple to run. You may find that your strategy ideas are profitable, and they could help you outperform the market.

Cap.Club Gives You a Lot

The fact that Cap.Club allows you to use its platform for free is great. While you will be limited in how many strategies and APIs you can run at once, it will help you to figure out if the platform makes sense for you.

For frequent traders having some sort way to use limit and trading orders is almost necessary. Buying and selling at market rates isn’t ideal. Trailing stops and take profit orders can help you to ride a winning position, which makes it possible for a single position to make the entire subscription worthwhile.

The big downside to Cap.Club is the fact that it only supports two exchanges.

If you don’t want to trade with Binance or Bittrex, then Cap.Club isn’t going to be of much use to you. That said, it is really easy to set up Cap.Club with Binance and Bittrex, which makes opening a new account at one or both of the exchanges worth thinking about.

Easy Set-Up and Support

Once you open up your Cap.Club account, all you have to do is go to the exchange of your choice, and generate an API. You will get a new API, and a secret code. Just go back to Cap.Club, and enter the info into the fields it provides you with. The process is super simple, and should only take you a few minutes.

Cap.Club also has a deep support section online. If you need help connecting your exchange account to their platform, or figuring out how to use any of the tools, you should be able to find any information you need. The support is included with both account types, which is a great feature.

Overall Cap.Club looks like a capable automated trading platform that also gives traders some useful tools, as long as you use one of its two supported exchanges.

Exchange Valet

Unlike many of the other trading bots on this list, Exchange Valet is more of a trading toolset and crypto portfolio management platform. Most crypto exchanges don’t give traders a ton of tools to use. Exchange Valet is filling in the gaps with commonly used trading tools like simultaneous stop loss and take profit orders.

If you are used to using a trading platform like MT4 or MT5, the ability to set simultaneous stop loss and take profit orders is taken for granted. Many exchanges don’t support either order type, or allow traders to use both at the same time.

Exchange Valet lets you set both stop loss and take profit orders at the time time, which is extremely useful for active traders.

Let’s say you want to open a position in BTC, but your expectation is that it will rally for another 10%. If you are wrong about the direction of the BTC market, there is no need to stick around and watch your trading capital get eaten up by a nasty downward price movement.

Exchange Valet’s platform would allow you to open up your BTC trade with both a stop loss and take profit order at whatever price level you like. If you are correct, and BTC rallies by 10%, Exchange Valet will lock in that profit by selling the position. If you got it wrong, your stop loss will keep a volatile market from blowing up your trading account.

Handy Portfolio Management Tools Too!

Exchange Valet also allows you to keep an eye on all your positions, and rebalance them almost automatically. The platform will display all of your crypto holdings on a pie chart, and allow you to buy a specific percentage of your portfolio’s total value in a single crypto.

Let’s say you want to hold 40% of your total portfolio’s value in ETH. Exchange Valet will give you a simple input field that will let you buy whatever percentage of any crypto that you like. This is an easy way to make sure you maintain the balance of cryptos that you like, without doing a ton of work.

Exchange Valet also has solid communication tools. All of your orders can be delivered via Telegram (they call it Speedtrade), and other information will be emailed to you if you like. Portfolio info can also be delivered with Telegram, or by using the platform’s proprietary chatbot.

Exchange Valet Lacks Some Features

If you are looking for an automated trading platform, Exchange Valet isn’t going to be a good choice for you. While it does offer super useful trading features, it really isn’t a trading bot. It is also limited to Binance and Bittrex. This may or may not be an issue, but it is something to consider.

Exchange Valet is also costs cryptos to use. The platform offers new users a 14 day free trial, but after that it will cost you $29 USD per month, $75 USD for three months, or $250 USD if you buy a year’s worth of service.

If you are an active trader with a big portfolio these prices could make sense, although there are other platforms that give you more features for a similar price.

Two areas where Exchange Valet shines are security and connectivity. The platform meets ISO 27001, ISO 27017, and ISO 27018 standards for data security. It also offers a lot of information via Telegram, which is great if you want to keep an eye on your portfolio when you aren’t in front of a computer.

Worth Learning More About

If you prefer to trade your own account, Exchange Valet could be a great tool for you. While it does lack algo-based trading features, it does offer traders all the tools they would find on a conventional trading platform.

Exchange Valet takes your security seriously, which is great to see. The communication tools that Exchange Valet built are also useful. If you are looking for a platform that fills in the gaps that exchanges left open, Exchange Valet is worth a deeper look!

Signal Groups

Signal is a platform that is made specifically for Binance. Signal does give traders on Binance some badly needed tools, and a high level of connectivity. If you want automated trading, or to use another exchange, this platform isn’t for you.

Much like Exchange Valet, Signal gives traders the tools they would find on a trading platform like MT4. In addition to simultaneous stop loss and take profit orders, it also allows traders to program laddered buying, as well as trailing stops.

Most of the features that Signal offers are extremely useful for traders. While a platform like Signal isn’t really going to be useful for a crypto investor who is looking to HODL for the long-term, the tools that Signal delivers will help traders who are used to fully-featured trading platforms.

Signal is Built for Binance

If you trade on Binance and are looking for advanced trading tools, Signal could be the right platform for the job. As mentioned above, being able to use stop loss and take-profit orders simultaneously is a must for traders.

In addition to adding simultaneous stop loss and take-profit orders, Signal gives you the ability to buy into a position over a period of time. This is called a laddered buy, and it cab be handy if you think there is a big move coming in a token’s price.

Instead of buying your entire position at one, you can automatically set Signal up to do the buying for you. This can also be good for larger traders who want to spread their orders out, and reduce the chance they will influence the market price of a token noticeably.

Signal also offers two interesting tools that some traders might find useful.

The platform allows users to sell existing coins, and also has a ‘targets’ tool. The sell existing coins tool allows Signal users to sell specific coins, and the targets tools lets traders set levels where positions can be sold. Both tools may be handy for advanced traders.

Great Connectivity

Signal offers a simple set of tools, but it can be accessed from almost any device. Many of the other platforms on this list have to be run on a computer, and won’t work on iOS or Android.

Connectivity is one area where Signal shines. You can use the platform from just about any device, including the two most popular mobile operating systems. If you are looking for a fully-featured trading platform for Binance that you can use almost anywhere, Signal is a good fit.

The platform will also notify you via SMS when your orders are executed, which can be handy if you need to stay on top of the market. It also gives you the ability to track your trading performance over time, which can be very handy if you are trading frequently.

Not Built for Everyone

Signal isn’t going to be a good fit for every crypto trader out there. While it does fill in some gaps on Binance, it only works with one exchange, and doesn’t offer any sort of algorithmic trading options. If you are looking for a bot, this isn’t the platform for you.

There isn’t much information on the costs involved with using Signal, and it could be free. There is also the promise of more features in the future, as the website states that “this is just the beginning.”

If Signal is free to use, and the team behind it is planning to add exchanges and features in the future, it is very promising for the platform. As it stands today Signal is a good looking product that has a clean interface, as well as a solid development team behind it.

The platform seems to be geared towards frequent traders, and could be a good fit if you are on Binance, and trade a lot. Even with the more basic trading tools that Signal offers regular traders will probably have a much raiser life.

Live Trader

If you are looking for a one stop trading bot platform, Live Trader could be the thing for you. Depending on which plan you decide to sign up for, Live Trader will give you access to 25, 250 or 1000 unique trading bots.

Live Trader also works with some of the largest crypto exchanges out there. You can use Live Trader with Polonix, Bitstamp, Bitfinex, Binance, KuCoin and Kraken. The platform is 100% cloud-hosted, which makes it easy to run on just about any hardware there is.

Connecting Live Trader to your exchange, or exchanges of choice is simple, and Live Trader has lots of support tools online to help its clients get their account set up quickly.

The real advantage that Live Trader offers clients is the sheer number of trading bots, as well as a novel back-testing system. Unlike some platforms that need direct access to an exchange to do backtesting, Live Trader can run advanced backtesting simulations on paper.

Live Trader Offers a Lot

The first thing to notice about Live Trader is the number of exchanges that it will function with. Instead of being limited by your trading bot, Live Trader gives you numerous choices for an exchange. It also allows you to run multiple trading strategies at the same time, depending on which plan you decide to purchase.

While Live Trader is a pay-only service, it does offer a limited free trial so you can learn more about what you would be buying if you sign-up. The basic plan allows you to run one strategy, the mid-level plan gives you five simulations strategies, and the top-level plan that gives you 1000 bots to choose from will let you run 10 of them at once!

If you are wondering about pricing, the base plan costs $15 USD per month, the mid-level plan costs $39 USD per month, and the top-level plan will run you $79 USD per month. Given that Live Trader takes care of all the hosting, the rates it charges aren’t unreasonable.

Geared for Algos

Live Trader is definitely set up for traders that want to use algos. If you are looking for a platform that will give you some advanced order types, and a few basic algos, Live Trader might be overkill. On the other hand, if you are looking for a deep selection of automated trading algos, Live Trader could be a perfect fit.

There are a truly amazing number of automated trading algos on Live Trader. In addition to the algos that Live Trader has available, there is also an algo marketplace you can browse through.

If you would like to develop your own trading tools, Live Trader has a strategy builder that will allow you to construct your own strategies, and back test them on any exchange the platform supports. All of this adds up to a huge selection of algos for automated crypto trading on some of the most popular crypto exchanges out there.

Not a Freebie

Live Trader does deliver a lot of algorithmic trading, but it isn’t cheap. If you are on the fence about how algos might fit into your crypto trading, Live Trader could be a lot to take on at first. The entry-level plan Live Trader isn’t too expensive, and could be a good place to get started with automated crypto trading.

With all the features that Live Trader includes, it is reasonable to expect that the more advanced plans would cost substantially more.

Live Trader lets you trade on numerous exchanges with a multitude of algos at the same time, which isn’t the easiest thing to do on the back-end. All those cloud servers cost money, and doing the same thing on your own machine would get expensive.

Live Trader is a Great Platform for Algo-Driven Trading

There isn’t any getting around the amount of algos that Live Trader lets you access with either the mid or high level subscription. Having 250+ algos to choose from is an amazing tool set for any crypto trader to use.

If you are looking for a platform that delivers loads of algos, works with many of the most popular crypto exchanges, and lets you do extensive off-exchange backtesting, Live Trader is worth learning more about.

All of the plans also have a solid support system backing them up, which you can learn more about on the platform’s website. The homepage also offers a chat window, which is nice to see!

GunBot

GunBot is a well known cryptocurrency trading bot which uses individual strategies that are completely customisable to fit your trading style. It can operate on the following exchanges: Bittrex, Binance, Poloniex, Bitfinex, Cex.io, GDAX, Kraken and Cryptopia. You can run the bot on your own computer or use a VPS and can manually add different coin pairs, pick a strategy and set it to work.

GunBot a versatile trading platform, and it also offers a lot of value for the money. The platform has a few different plans, that range from 0.04 BTC for the Starter Edition to 0.3 BTC for the Ultimate Edition. At current prices, the starter edition would only cost $160 USD, and offers users the option to buy a lifetime license for an additional fee.

The features that GunBot includes in its Starter Edition are worthwhile for the price. Included in the Starter Edition is a copy of GunBot Lite, as well as three algos to choose from. The next two levels add loads of functionality, with the Pro Edition adding backtesting capabilities, and cryptosight as standard features.

GunBot can be used on any of the major platforms, including Linix or VPS. It is estimated that there are more than 6,000 traders that use GunBot on a daily basis, and it has gotten numerous positive

Gekko

Gekko is an open-source trading bot and backtesting platform that supports 18 different Bitcoin exchanges. Gekko is entirely free and can be found on the GitHub platform. Gekko is a relatively straightforward trading app to use that includes an interface and basic strategies from the outset, which allows you to be more comfortable with the use of the bot.

Gekko also has a number of plugins available that will allow you to be updated regardless of what level of connectivity you have. Although Gekko is not a high-frequency trading bot (making only a couple of trades per week, depending on configuration), nor a bot which allows you to exploit arbitrage opportunities, its list of supported exchanges and basic strategies means that it is probably a good place to start for anybody interested in utilizing Bitcoin trading bots.

Zenbot

Similar to Gekko, Zenbot is also an open-source trading bot for Bitcoin traders. As an open-source project, Zenbot is available for users to download and modify the code as necessary.

However, there have been question marks in the community over the development of Zenbot, with no updates having been made to the platform for a significant number of months. This means that no additional exchanges have been added to the platform for almost one year, meaning that it may have access to less information than some of its competitors. However, on the positive side, Zenbot, unlike Gekko, does offer high-frequency trading as well as supporting multiple cryptocurrencies in addition to Bitcoin.

Reasons to Consider Using a Bot

Cryptos are a great new asset class, but it is hard to create a return from them in the same way that cash or a stock creates value. Most people associate stocks with gains from price appreciation, but many of the best stocks pay out dividends. There isn’t really an analogue for this in the crypto market, unless crypto owners lease out their cryptos to derive an income from their holdings.

From an investment standpoint, passive income is extremely important. As the last year has shown us, we can’t assume that asset prices will show gains year-over-year. One argument for holding stocks through a bear market is that they will continue to pay dividends, which can then be reinvested in the company when the stock prices is depressed.

Cryptos are more like a commodity than a company from an investment standpoint, which leaves investors with something of a problem. There is absolutely no reason to hold on to a commodity in a bear market, as it doesn’t deliver any kind of return aside from price appreciation.

Trading Bots Give Crypto Investors Income Options

If you want to put your crypto portfolio to work for you, trading bots could make sense to use. There are many different kinds of bots out there, and some can take advantage of market movements to create gains automatically.

Instead of relying on dividends, trading bots allow you to leverage your crypto holdings to make an income via trades. This system of income generation may not be quite as secure as compounding dividends, but it is one of the only options available to crypto investors.

The ‘bot’ is important because unlike a human, it is awake and looking for income opportunities 24/7. Of course, there is no such thing as free money.

Any risk that can generate a return has the potential to lose money. It is a good idea to make sure that any automated investment platform you choose to trust with your cryptos can prove that it works with a verifiable transaction history.

Be Realistic About Returns

It is easy to get carried away with dreams of quick money made in the financial markets.

The years that led up to the massive crypto rally of 2020 were amazing, but now the reality of the crypto market is setting in. If you are looking to make the kind of returns that many saw in 2020 with a trading bot, you will probably be disappointed, or go broke.

The simple fact is that in order to create returns, you have to take on risk. The bigger the risk, the greater the possible return. On the other hand, when you take big risks, the possibility that you will face catastrophic losses is very real. There isn’t any algo that can ‘de-risk’ trading, no matter how advanced it is.

If you are looking to make 3-6% per year on your crypto holdings with a trading bot, you will probably find something that works for you. There are many low risk trading strategies that do produce returns, and an algo will make sure that you don’t lose your discipline lunging for the brass ring.

Keep in mind that a portfolio manager than can consistently produce annual returns around 10% will beat 99% of professional money managers. Expecting an algo to do more than that probably isn’t wise.

Conclusion

Trading bots can assist traders in ensuring that they are always interacting with the market, even when they are physically unable to do so. They can assist in removing some of the stress and emotions that are often found in any financial trading markets, not least the cryptocurrency market.

However, trading bots are not for everybody, nor does everybody need one. Casual investors are not the prime target of trading bots, and if your intention is to buy and hold Bitcoin then a trading bot is probably not the correct investment for you.

In addition, if you are not a competent programmer or familiar with the creation of financial strategies, trading bots may also not be for you. However, if you have the requisite knowledge and ability to overcome these obstacles then a trading bot can be a worthwhile tool in monitoring and making gains from the Bitcoin market.

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