Assuming that you currently hold/trade Bitcoin [BTC] or any of the other altcoins in existence, the fact that you are reading this implies that you are well acquainted with the volatile nature of this class of assets.
BTC’s journey to becoming the world’s largest cryptocurrency began in 2009, with an initial value of less than a penny. The price remained relatively stable in its early years. However, in 2013, it saw a surge in value, hitting an all-time high of $1,242 in November. This hike was short-lived though and within months, the price dropped below $200.
The following years were marked by periods of volatility, with the price hovering between $200 and $1,000. However, in late 2017, BTC’s value exploded, reaching an all-time high of nearly $20,000 in December.
Read Bitcoin’s [BTC] Price Prediction 2023-24
As market participation grew, the price rally was also short-lived. By early 2018, BTC’s price had fallen back down to around $3,000. The cryptocurrency market as a whole recorded a period of decline, with many investors losing significant amounts of money.
Nonetheless, BTC made a remarkable recovery, surpassing its previous all-time high in late 2020 and reaching an all-time high of over $68,000 in November 2021. However, the 2022 trading year ushered in a new era of bearishness, one exacerbated by the collapse of Terra/LUNA and FTX. In fact, in November 2022, BTC was trading at a two-year low of $15,000.
While the crypto-market may be unpredictable and volatile, traders and investors can still make informed decisions by staying up-to-date on market news, following expert analysis, and using intelligent trading strategies, such as those offered by ChatGPT.
ChatGPT: A messiah that can help you trade better?
In November 2022, the AI model ChatGPT was launched to the public. In fact, it quickly gained significant attention too. With its broad range of capabilities and versatility, the question arises as to whether there are other ways that ChatGPT can lend its expertise, such as assisting BTC traders in formulating and applying improved trading strategies.
When asked if it could do this, ChatGPT had this to say –
Source: ChatGPT
Due to its nature as an AI tool, there are limitations to what ChatGPT can do regarding price predictions and price future movements. However, there are ways to leverage the tool’s capabilities to formulate better trading strategies as a BTC trader.
One way to utilize the AI tool to make better trading strategies is by deploying it towards fundamental analysis. ChatGPT is capable of extracting insights from financial news articles, social media posts, and other unstructured data sources. This information can then be used in conjunction with other datasets to make informed trading strategies.
Another way to use ChatGPT as a BTC trader is to use it for sentiment analysis. ChatGPT can be fine-tuned to perform sentiment analysis on information from news articles, on-chain data providers, social media discussions, and other sources. This can be used to identify whether the BTC market lingers under positive sentiment or is plagued by negative sentiment.
Furthermore, ChatGPT can be used by BTC traders for technical analysis. Traders can ask ChatGPT to code any technical indicator or trading bot for any trading platform.
For instance, I asked ChatGPT to give me an example of a trading bot that I can use to track BTC’s price volatility in pine script – TradingView’s programming language useful for backtesting trading strategies. The AI responded,
Source: ChatGPT
To use ChatGPT for technical analysis, traders need to be familiar with the language to know when to make the necessary modifications for the code to work properly. The wording of the input is crucial in how ChatGPT understands the problem to provide the anticipated solution.
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For a well-rounded piece, I spoke to Brian Quinlivan, the Director of Marketing at Santiment, who also happens to have been involved in BTC trading for a few years.
Brian Quinlivan has an MBA degree in finance from Chapman University, Brian has over 10 years of marketing, financial, and data analytics experience. He enjoys creating financial models to improve modern-day investing strategies and study the intricacies of market variations.
Q: In what ways do you think ChatGPT can revolutionize cryptocurrency trading?
Yeah, I think that there’s going to be a lot of use for it, certainly for trading strategies. One thing to be concerned about is the uniform opinions that may result from an AI tech giving a kind of overarching strategy, whether it be hodling or fundamental strategy.
ChatGPT could easily be used for manipulation and even unintentionally manipulate its audience, and we’re already seeing slight effects of it.
I think it can be both helpful and dangerous at the same time and cause a lot of people to be educated much more quickly, but also be pulled in directions that can influence the way crypto goes and create a lot of self-fulfilling prophecies.
Q: How do you think a BTC trader/investor can leverage the AI tool to make better investment decisions?
I think, in short, I think scripts would be used in AI a lot more because of the fact that all of the data could be digested at the same time and given a very simple answer whether to buy or sell. This, I believe, can influence the markets tremendously moving forward.
Predict BTC’s price between 2025 and 2030
As mentioned above, ChatGPT is incapable of making future predictions. However, I asked it to provide me with its prediction of what BTC’s price might be between 2025 and 2030.
Source: ChatGPT
To get it to answer my question, I decided to jailbreak it by using the Do Anything Now (DAN) method. It had this to say afterwards,
Source: ChatGPT
What do you make of the aforementioned ChatGPT prediction? Too optimistic on the 2025 front or too pessimistic on the 2030 front? Well, could be either or could be neither.
Either way, it’s important here to understand that ChatGPT is now being used by thousands to dictate trading strategies. Whether it’s right or not, updated or not, what is clearly evident is that this AI tool is bound to have a far-reaching impact on how investors and traders look at crypto-assets including Bitcoin [BTC].
Source: https://ambcrypto.com/chatgpt-bitcoin-price-prediction/