‹ Back

Are Crypto Trading Bots Worth It? 2023 Market Study Reveals This

 

By Nerly Shammah Nov 20, 2023

 

Professional traders leverage automated systems to trade crypto assets - this market study shows how crypto trading bots play a key role in trading profitability.

 

 

It is almost impossible to maximize value generation via manual trading, this is why trading firms, professional solo traders and even exchanges, make use of trading bots with various complex software designs to trade and profit from the cryptocurrency markets. 

 

 

Overview Of Crypto Trading Bots 

 

Crypto trading bots used to be a thing only a couple of people could get their hands on due to the knowledge gap in programming. However, due to technological advancements and wider knowledge spread, crypto trading bots have become a business network and are widely patronized by both beginners and professional traders. 

 

But the question of whether they are profitable or not is unavoidable as new traders who've lost too much manual trading or simply traders who do not have the luxury of time to solo trade the markets come to seek the empowerment of crypto trading bots. 

 

Report shows that 38% of surveyed crypto traders use bots to trade the markets, and this number of users accounts for over 86% of the volume traded.

 

Such data could cast a fear of the unprofitability of crypto trading bots onto the minds of beginners given that it is also a known fact that 95% of crypto traders lose money trading.

 

Though the surveyed users representing the first data are just a little over 10,000 traders, 38% would be around 3,800 traders. There are over 295 million crypto users, if we consider them “traders” for the sake of simplicity, a 95% losing money would mean that over 280.25 million crypto traders lose money trading and only 14.75 million(5%) make money. 

 

Some important points to note here is that the greater crypto users are unlikely to be exposed to trading bots, most will be manual traders, much as out of 10,000+ users surveyed, 62% reported not being exposed to bot trading. This casts a strong reflection on how the greater population are manual traders. 

 

This would mean that why there's a large number of users counting losses may be because they are manual traders, trying to outplay a market environment with millions of live trading bots. The greater half of the 5% of profiting traders are likely using trading bots looking at these numbers. 

 

Insights From Traders and Community Sentiment

 

To put things into focus, determining the true impacts of crypto trading bots would require hearing from actual users of these systems. Data from multiple crypto trading bots review pages shows an overall “positive” experience with ratings over 4 out of 5 on the Trustpilot review platform. 

 

For example, Bitsgap has a 4.4 rating out of 5 with over 500 reviews. Bitsgap boasts over 500,000 users, over 3.7 million bots launched, $300 billion in traded volume and a 1.23% average daily profits from trading. 

 

A trader reported making $50,000 in 4 months of using Bitsgap trading bot and guess what the starting capital was? Just $1,000!

 

Too good to be true? Yes, you're right, but what most people do not understand about crypto trading bots is that they are not magical creatures, the outcome of your trades will depend largely on the deployed strategies - that is - the instructions you give the bot on how to trade the markets. The good news here is that for traders who may not have any clue on how to customize their bots for the best trading practices, there are numerous strategies on the marketplace of these trading bots platforms which users can buy and implement, truly automate and work-less for more asset security and trading profits. 

 

In 2022, a report surfaced of crypto trading bots making millions of dollars via sandwich trading. 

 

The term “sandwich” refers to a process by which a bot is programmed to spot or identify when a trader is attempting to purchase a select crypto asset on a blockchain. The bot simply places an order on the same token, with the hopes of completing the transaction first and driving the asset’s price up. The bot then “completes the sandwich” by selling the token to the original trader at a higher price tag. 

 

This bot trading strategy racked in millions if not billions of dollars in profits for developers of this software. With a 24/7 market environment, it is only inevitable that crypto trading bots will continue playing a pivotal role in the crypto markets for both traders seeking profits and projects to leverage them to attain stability - as seen in algorithmic trading systems leveraging bots to maintain stablecoins price stability. 

 

 

Purpose Of Crypto Trading Bots

 

While there's the misconception that crypto trading bots are primarily designed to make traders rich overnight, this isn't the case and a complete oversight of what the first-place solution that comes with using a trading bot is. 

 

In all brevity, the purpose of crypto trading bots is to mitigate loss in crypto trading. This is the primary solution and it solves this by taking away the “human emotions” in trading. Earning profits becomes the second solution it brings to the table because when losses are limited, the reverse(profits) is to be expected. 

 

Crypto trading bots reduce emotional impact and increase efficiency in trading as it autonomously functions, 24/7 after a strategy has been deployed and the bot is live. While the technical risks and dependence on market conditions and volatility risks remain a challenge in the use of crypto trading bots as with the use of any automated software program, crypto trading bots are far more effective for trading with minimal risk and an upside for high profits than manual trading would ever be. 

 

What Are The Best Crypto Trading Bots To Try Out? 

 

The best crypto trading bots in 2023 to try out include:

 

● Cryptohopper with 751,222+ users and 16+ exchanges supported. 

 

● Bitsgap with 500,000+ users and 15+ exchanges supported. 

 

● 3Commas with 220,00+ users and 15+ exchanges supported.

 

● Coinrule with 130,000+ users and 10+ exchanges supported. 

 

● Tradesanta with 127,000+ users and 9+ exchanges supported. 

 

● Wundertrading with 80,000+ users and 14+ exchanges supported. 

 

Are Crypto Trading Bots Worth It? 

 

Yes! Crypto trading bots are worth using if you wish to compete and win trades in the crypto markets. 

 

Are Crypto Trading Bots Safe? 

 

Yes! Crypto trading bots are safe to use, however, it is important to always review the system before using. Reputable commercial trading bots like those listed above have numerous user reviews you can leverage, also, these platforms clarify that their bots cannot initiate withdrawals of user assets. 

 

The Bottom Line 

 

The dynamic landscape of crypto trading bots in 2023 presents a nuanced picture. While these automated tools offer notable advantages, they are not without a flaw as noted above. 

 

This market study has shed light on current trends, through insightful case studies, we've observed both successes and ways failures can crawl in, extracting valuable lessons for traders navigating the realm of automated trading.

 

Security and risk management are paramount in this space! 

 

Looking ahead, the future of trading bot technology is promising, with anticipated developments such as the wide implementation of artificial intelligence software to improve trading practices. Crypto trading bots such as Cryptohopper already have AI integrated into their system to enable trading bots to learn from past trading data and improve execution. 

 

That said, the bottom line holds one truth and that is that crypto trading bots are worth it, customization with the right trading strategies is however paramount for maximal rewards!