Should you use a Bitcoin bot in 2021?
If its performance in 2020 and the first few months of 2021 is any indication, Bitcoin (and cryptocurrency in general) is bound to have a fantastic year. Cryptocurrency has always had its fair share of believers, with blockchain technology slowly creeping into mainstream consciousness over the last decade.
But following strong support from influential figures like Elon Musk and Mark Cuban, cryptocurrency awareness has undeniably reached new heights. Since Musk’s Tesla Inc. invested $1.5 billion in Bitcoin, the most famous cryptocurrency’s value has reached unprecedented levels.
How people make money in crypto
The rise in the popularity of cryptocurrency has led to an increase in crypto traders and investors. In general, people make money in crypto by:
- Riding short-term swings in asset price by buying low and selling high, or
- Buying assets consistently to lock in long-term gains
While the second strategy is generally recommended because it’s easier to do and comes with lower risk, buying low and selling high has always been the go-to strategy of crypto fans who want to earn as much as possible from crypto. When done right, crypto trading can result in gains that simply cannot be achieved through passive investing alone.
For this reason, people have turned to crypto trading and Bitcoin bots to execute their trading plans, minimize risk, and safeguard their profits.
The rise of the crypto trading bot
Crypto trading bots are software programs that work with cryptocurrency exchanges to analyze market data and execute buy or sell orders for the user. There are many different types of crypto bots. There are Bitcoin bots, Binance bots, and altcoin bots, to name a few, depending on which platforms can use the bot and what types of assets it primarily deals with.
These bots strictly act within a pre-programmed set of rules. A trading bot monitors market activity, analyzes trading data, and places buy or sell orders following the rules set by the bot maker or the user themselves.
Some bots are free; some are paid. But they all work with one purpose in mind: to help maximize your earnings in crypto while managing the risk associated with trading.
Are you interested in using a crypto or Bitcoin bot? Let’s look at a few pros and cons.
Pros of using a Bitcoin trading bot
1. Bitcoin bots are fast and efficient.
Because crypto is highly volatile, being able to act fast when trading is crucial to success. Bitcoin bots help in this regard as they can initiate trades instantly. Additionally, trading bots harness the power of machine learning and technology to analyze multiple cryptocurrencies at a time -- something that simply cannot be done by the human brain alone.
2. Bitcoin trading bots aren’t influenced by emotion.
The market’s ups and downs are known to trigger intense emotions in humans. As a result, many people incur losses because of impulsive decisions from FOMO or FUD. This doesn’t happen when you use Bitcoin bots because all transactions occur according to the predetermined set of rules that are programmed into the bot.
3. Crypto trading bots work 24/7.
Even the most hardcore Bitcoin trader can’t monitor their computers around the clock to execute trades, and this could mean many lost opportunities to make a profit. That said, crypto trading bots work 24/7 so you never have to stop looking for and grabbing opportunities.
Cons of using a Bitcoin bot
1. Some crypto bots can present a security risk.
Crypto trading bots have to be integrated into your cryptocurrency exchange platform using an API (Application Programming Interface). This allows the bot and exchange to automatically work together without the need for your intervention. Some API keys can only trade your account while others also have the right to withdraw assets. If you give a rogue bot the right to withdraw, it can steal all the assets in the account. This is why it’s essential to stick to well-vetted, trusted bot developers and connect it only by API keys that do not have withdrawal rights.
2. Setting up the bot could be difficult.
Some bots have dozens of different settings to fit any trading strategy. While that’s great for advanced traders, this could be simply too much for a beginner. Constant tinkering with settings then defeats the main purpose of using a bot: you’ll spend too much time and will still have doubts and fears about the bot’s performance.
3. Finding the right strategy can be tricky.
There are easily dozens of crypto bots right now, and not all of them will be able to give you good profits. In fact, a good number of these bots will likely end up incurring losses on your behalf. Finding a well-built bot that operates with a profitable algorithm is hard, so lots of research is needed before you go all in.
How to find the best Binance bot for you
In theory, all Bitcoin bots should work well and deliver greater profits than what you would have earned if you just HODL-ed your investments. But in reality, some crypto bots simply don’t work. To maximize your chances of success in using crypto bots, we recommend that you look into the following factors:
- Security. Look for a trading bot with a good track record for safety and security. You don’t want your hard-earned money to fall into the wrong hands.
- Profitability. Look into the bot’s success rate to assess its performance. For example, Cindicator’s Stoic bot has an impressive performance history, making +2,193% in profits since March 2020 as of this article’s writing.
- Ease of use. Bitcoin bots are supposed to make your life easier, so look for one that is easy to install and configure and intuitive to use.
- Price. As mentioned above, some bots are free, while others require you to pay a certain amount for access to the API. Some bots don’t charge a fee upfront but take a small percentage of the profits you make — this could add up quickly.
So, should you use a crypto trading bot in 2021?
The short answer is: yes, you should definitely explore using a crypto bot to help maximize your earnings in crypto. Granted, you have to carefully look into the bots you’re considering so you don’t end up with a dud. But all things considered, using a well-designed, reliable, and secure crypto bot like Cindicator Stoic will enable you to grow your crypto portfolio and earn profits with minimal effort.