Automatic trading bots have appeared in the cryptocurrency market following the appearance of robo advisors that help investors manage their investments based on artificial intelligence (AI) and big data.
According to cryptocurrency industry sources on June 19, the number of cryptocurrency trading assistant bots, such as Coinsum and Watchbot, have been on the rise. These software programs sell and buy cryptocurrencies by watching the market’s price movements and using a quant trading method and various algorithms. They make a profit by buying virtual currencies whose prices have fallen excessively and selling them when the prices go up.
Cryptocurrency investors who have had sleepless nights due to a lack of investment expertise or around-the-clock market fluctuations use such bot services.
By company, blockchain technology firm Coinstream developed its own automatic cryptocurrency trading bot service “Coinsum” in May and has been providing the service since July last year. Coinsum now operates a bot service that is linked to large cryptocurrency exchanges at home and abroad, including Binance and Bithum, and will soon launch a bot for Upbit, the largest cryptocurrency exchange in South Korea. Currently, the number of Coinsum subscribers is around 300, with 100 out of them actually purchasing coins using the service. Coinsum’s bot for Binance earned some 1 percent profit a day on average in May while the bot for Bithum posted 2 to 3 percent profits a day on average.
Another blockchain company Jane/KIN released Watchbot, which not only automatically trades virtual currencies but also allows users to create their own trading strategies. Users can copy and use investment experts’ investment strategies. There were 4,068 Watchbots in operation in the first week of May, with the amount of their weekly transactions reaching 87 billion won (US$77.96 million).
Findexchain introduced an automatic trading bot service which is available inside the electronic wallet Ionia. The automatic trading bot service can be used in cryptocurrency exchanges including Bithum, Coinone, Poloniex and Bittrex. Users can download the Ionia app from Google Store, select “trading” in the menu and complete the settings by following the instructions. They can set the use period – a week or a month – and choose whether to sell or buy virtual currencies after checking the rate of return. Findexchain is also planning to offer the automatic trading bot service in the form of web apps in the future.
More bot services from home and abroad have entered the fray, including Profit Trailer, Gunbot and Coinbot24.
However, there are growing concerns over security of these cryptocurrency service bots as a series of cyber attacks have recently occurred. An official from an automatic cryptocurrency trading bot company said, “Both cryptocurrency exchanges and automatic trading bot service providers are double-encrypted with API Key and Secret Key. We are improving security so that users’ trading rights are protected as much as possible. We are now paying special attention to security and will always continue to focus on raising security.”