Cryptocurrency traders are using crypto trading bots to automate their investments and maximize their profits while trading, and more each year. When used with other risk-management tools, a crypto trading bot can help take some of the emotions out of your trading strategy, enabling you to place and execute trades based on data and trends. But what are the advantages and disadvantages of using these bots to enhance your trading — and are they really profitable?
Our guide for beginners will help you learn more about crypto trading bots and introduce you to a few of our favorite trading bots currently available.
What is a Crypto Bot?
A cryptocurrency trading bot is a computer program or application that you authorize to buy and sell crypto according to predefined specifications. Most crypto trading apps work in a straightforward manner — you’ll authorize the bot to buy or sell an asset if and when it reaches a specific price point. Your bot will then take care of placing and executing your order so you don’t need to monitor your platform all day to be there when price movements are reached.
You can customize your crypto bot to execute orders according to your unique trading strategy. For example, you might instruct your bot to sell a lot of coins at a price of $10 and buy them back if the price falls back to $9. Most cryptocurrency bot providers charge a monthly or annual fee in exchange for using the bot’s services. The supported cryptocurrencies, exchanges and account options available through your trading bot will vary depending on the provider you choose to work with.
Best Crypto Bots Right Now
As the cryptocurrency market gains more attention, it’s now easier than ever to get started with a bot to help enhance your investment strategy. Let’s take a look at a few of our favorite crypto trading bots now.
Best for Advanced Options: 3Commas
Investors who are experienced in the cryptocurrency market and looking for the widest possible range of advanced features should be sure to consider 3Commas. 3Commas provides investors with some of the most sophisticated settings and features we’ve seen from crypto bot providers. Some of the platform’s most unique features include:
- Same trade terminals: With the 3Commas Smart Trade terminal feature, you can simultaneously view currency exchange rates and your Trading View signals. This allows you to take profits while also protecting yourself and your investment with stop-loss signals.
- Options trading bot functionality: You can do much more than just buy and sell cryptocurrencies with 3Commas. The platform supports automated options trading and also includes an explainer course for new investors interested to learn more about the options market before they start investing.
- Connection with 23 exchanges: 3Commas offers connection with 23 major cryptocurrency exchanges on all of its paid accounts. In addition to trading, you can refine your investment strategy with 3Commas’ paper trading functionality.
With a wide range of advanced features and connections with some of the largest crypto exchanges in the world, 3Commas can be an excellent choice for intermediate and experienced investors. 3Commas begins at $14.50 per month and extends to $99 per month depending on your chosen billing frequency and your package plan.
Best for Consistent Connectivity: Cryptohopper
The cryptocurrency market is constantly moving — even short periods of downtime can result in missed profits when you’re relying on a cryptocurrency trading bot. Cryptohopper is a 24/7 trading bot that hosts its services entirely using cloud storage. This means that the bot experiences 0 downtime, and updates are served without interrupting your trading or putting a halt on your account. Even when your network is offline, your Cryptohopper account will continue working.
Cryptohopper also offers an easy and intuitive setup process, with no credit card information required to join. Simply sign up for your account and get started investing — no platform installation required. The bot also integrates social sentiments with other investors, which can further enhance your trading and help you refine your strategy.
Best for Low-Cost Access: Pionex
If this is your first time trading crypto using a bot, you might not be sure if you’re ready to commit to purchasing a month-long package. If you’re looking to explore trading bot functionalities without making a commitment, consider opening an account with Pionix.
Pionix is the world’s first cryptocurrency exchange with a built-in trading bot. Using Pionix’s platform, you can directly buy and sell cryptocurrencies while also using 1 or more of the platform’s 12 native trading bots. Fees on Pionix are low — you’ll pay just 0.05% in fees when using the platform. With a variety of bots to choose from and an easily programmable system, Pionix can be an excellent choice for investors who aren’t yet sure if a trading bot is right for their needs.
Best for Backtesting: Bitsgap
If you’re searching for an all-inclusive crypto trading bot, Bitsgap might be the right option for you. Bitsgap’s cloud-based application is constantly searching the market for new trading opportunities and can alert you when potential shorts have been found.
If you’re the type of investor that prefers to create their own custom strategy, you’ll appreciate Bitsgap’s backtesting features. Backtesting from Bitsgap allows you to hypothetically set bot parameters and see how you’d be likely to perform using the current market conditions and historical price data. Create your trading bot with just a few clicks, test your strategy and more directly through Bitsgap.
Best for Preset Strategies: Coinrule
When it comes to providing the widest range of preset trading strategies, it’s hard to beat Coinrule’s wide selection. The crypto trading bot currently allows users to customize their investing with more than 150 trading templates that are automatically executed when market conditions meet predefined parameters. From accumulation to long-term holding strategies and stop-loss settings, Coinrule is constantly introducing new templates to its platform.
Though the number of templates that you’ll have access to will vary depending on the plan you choose, Coinrule offers a free package with 7 complimentary template strategies and up to $3,000 in monthly trading volume. Additional paid packages include features like advanced charting options, unlimited template usage and even one-on-one trading tutorials and lessons.
Do Crypto Bots Actually Work?
Many crypto trading bots purport a high level of successful trades. However, remember that the cryptocurrency market is constantly changing and price trends are always fluctuating. If you plan to take a completely hands-off role when it comes to investing, you may not see the same type of results that you would actively managing and reprogramming your trading bot based on market conditions.
Are Crypto Trading Bots Profitable?
Crypto trading bots can help you make more educated trades and remove some of the emotions that might lead to increased losses. However, it’s important to remember that crypto trading bots are simply pieces of software — they cannot guarantee a profit for any investor and they may quickly become less useful during periods of high market volatility.
Advantages of Crypto Bots
If you’re the type of trader who tends to make market movements driven more by your emotions than your trading strategy, a crypto trading bot might be able to help you enhance your trades. Some of the advantages that come with using a crypto trading bot include:
- Automated investing options: From panic selling to fear-of-missing-out buying, there are a countless reasons why a person might choose to execute a trade that causes them to lose money. When you rely on an automated investing bot, none of these factors will come into play.
- Faster speeds and more efficiency: It can take an individual trader minutes or even hours to fully scan the entire cryptocurrency market searching for opportunities. By the time you spot a potential opportunity, the market could shift in the opposite direction.
Crypto trading bots are significantly more efficient, scanning entire sections of the cryptocurrency market in as little as a fraction of a second. Your crypto bot can also enter and execute orders faster than you can enter the same orders manually. If you’re looking to add another layer of speed and efficiency to your trading, employing a crypto trading bot might be the right move for you.
- More time on the market: Unlike the stock market and the forex market, the cryptocurrency market operates 24 hours a day, 7 days a week. It’s not feasible for investors to spend 24 hours trading. Crypto trading bots provide you with additional hours of exposure without requiring you to be actively monitoring your positions.
Disadvantages of Crypto Bots
Cryptocurrency trading bots aren’t for everyone. Some of the disadvantages that come with using these features include:
- Prerequisite knowledge: Though many cryptocurrency trading bots come with predefined settings and templates, you’ll need to know how to set these templates and when each template will be executed. If this is your first time trading cryptocurrencies, changing the settings on your trading bot can result in fast losses.
- Requires monitoring: Trading bots aren’t a “set-it-and-forget-it” solution to cryptocurrency trading. The cryptocurrency market is volatile, and trading bots can result in losses during periods of high volatility. If you don’t have the skills or knowledge to monitor the market, a trading bot may not be the best choice for you.
Investing in a Crypto Trading Bot
If you aren’t sure cryptocurrency trading is right for you, you might want to take some time to learn more about the market by monitoring how prices are changing. Tracking how some of the largest cryptocurrencies are moving and practicing with a paper trading account can help you enter the market more effectively.
Gemini builds crypto products to help you buy, sell, and store your bitcoin and cryptocurrency. You can buy bitcoin and crypto instantly and access all the tools you need to understand the crypto market and start investing, all through one clear, attractive interface. Gemini Crypto Platform offers excellent account management options. You can manage your account at a glance, view your account balance 24-hour changes and percent changes. Get started with Gemini now.