Crypto trading bots, as the name suggests, are bots that can automatically execute trades at the predetermined bid and ask prices. Essentially, you’re inputting a range at which you would like to make buy and sell orders. And the bot will execute these for you as soon as the crypto hits that price target. Since these are operating 24 hours a day and seven days a week, these little trading bots can get awfully busy!
Now I completely understand that cryptocurrency trading isn’t for everybody. The markets are more or less unregulated, open 24 hours a day, and experience high levels of volatility.
It takes a strong stomach to withstand 10% drops in price over the course of a few hours. But in my experience, a lot of people don’t invest in cryptos because they don’t understand them. So why not learn something new today? Let’s learn about crypto trading bots!
So first, I guess we need to explore what the word bot means. Well, bot is a short-form of the word robot and is an automated piece of computer software that can complete repetitive tasks.
Some other examples of bots are chat assistants on websites, and oh so annoying social media bots that respond with a scripted message on sites like Twitter or Facebook.
The best part about a crypto trading bot is that you have the potential to make some passive income in the background. The bot is always trading, whether you are logged on to the platform or not.
Even while you sleep, your crypto trading bot can be executing trades and navigating the volatile crypto markets. You can set your bid and ask range as conservative or as aggressively as you want to. In theory, this is a fairly safe and sound strategy when executed correctly. I’m not saying you’ll make millions, but after a while, you could have a steady flow of income!
Are Crypto Trading Bots Legal?
Would I be telling you guys about a trading service if it were illegal? Of course, crypto trading bots are legal! What you do have to worry about though is if your particular crypto trading platform will allow you to use one. Most of the bigger platforms like Coinbase, Binance, and Gemini all allow trading bots. If you think about it, why wouldn’t they? Since the exchange takes a fee off every trade made, it is actually in their best interest to allow users to make as many trades as they can.
Another reason why crypto trading bots are legal is that stock trading bots are legal for most brokerages. It’s not something all traders are aware of, but it’s sort of the retail version of institutional algorithms that will buy or sell shares when they hit certain levels.
There is a reason why technical analysis is an excellent way to trade stocks. Institutional algorithms use moving averages, as well as support and resistance levels to set their algorithms to trade. It is the exact same logic that you can use on a crypto trading exchange with a crypto trading bot!
What Are the Best Crypto Trading Bots?
So have I convinced you that crypto trading bots are a legitimate way to potentially make some passive income? Even if I haven’t, I’ll list some of the more popular trading bots here that are widely used.
With things like trading bots, the more traders that use them, the more chance they are legitimate software. Keep in mind that not every bot will work on every crypto exchange.
Since most of them are integrated via specific APIs for each exchange, you should make sure you find one that works with the exchange you use. Let’s take a look at some of the most popular crypto trading bots!
Coinrule: Coinrule is one of the newer crypto trading bots on the market, but it is suitable for both advanced and beginner traders. This trading bot works with popular exchanges like Coinbase Pro, Binance, and Kraken.
It is a web-based platform that integrates with exchanges using various APIs that allow trades to take place within 500 milliseconds.
The subscription to use Coinrule has several different tiers. Pricing starts from, well, free if you want to use a very limited version of the product. The free price tier does last indefinitely so you can theoretically use Coinrule for free forever.
One step up is the Hobbyist tier which is $29.99 per month, then the Trader which is $59.99 per month, and finally the Pro tier which is $249.99 per month.
Cryptohopper is a 24 hour per day crypto trading bot that has been touted as one of the most user friendly bots to use. The bot is compatible with most of the big exchanges including Coinbase Pro, Binance, Kraken, and Kucoin. It is a cloud based platform that allows semi-automatic trading based on user preferences. Cryptohopper’s pricing is fairly reasonable with a free trial stage, and additional tiers of $19.00, $49.00, and $99.00 per month. Cryptohopper includes some of the more commonly used technical indicators for users to integrate. If you need help, Cryptohopper has a live support team that can be contacted through the app or via their social media pages.
Here’s a trading bot that is designed to be used on your smartphone. CryptoHero is actually powered by artificial intelligence and proprietary algorithms that help make trading easier. It integrates directly into any of the large crypto exchanges like Kraken, Binance, Coinbase Pro, or Huobi. CryptoHero is great for those who just don’t have the time to sit in front of a computer all day. It is a ‘set it and forget it’ strategy that is exceptionally priced compared to other trading bots. Cryptohero has a basic service that is free to users, and a premium service for $13.99 per month or $139.99 annually.
More Bots to Consider
Botsfolio: Is it just me or do all of these crypto trading bots have clever names? Botsfolio is great for casual traders who want a diversified portfolio of cryptos.
While other crypto trading bots will generally trade one crypto at a time, Botsfolio will buy and sell different cryptos to add to your portfolio.
It is like an automated portfolio creator! Right now, Botsfolio only works with Binance or Coinbase Pro, so if you use a different exchange you’re out of luck. The pricing structure is slightly different from other crypto trading bots.
The initial cost is $18 per month for a portfolio of $1,000. Once all that capital has been used, it bumps up to $20 per month but can run as high as $72 per month for a $50,000 portfolio.
TradeSanta: Yet another crypto trading bot with a cool name! TradeSanta wants to help the smaller traders build up their accounts. The bot is very reasonably priced with a tiering range of $14 per month to $30 per month.
The free trial is only three days long so you better make up your mind fast! The user interface is clean and easy to use, whether you are using the web-based app or the mobile app. TradeSanta prides itself on its simplicity and affordable monthly subscriptions that target the casual crypto trader.
What is the Best Crypto Exchange to use a Bot with?
As you can probably tell, most of the major crypto trading exchanges will allow you to use a trading bot. Is any one platform better than the others? Not in my experience. Personally, I use Coinbase Pro and Binance, but have also used Kraken in the past. In terms of simplicity, I think Coinbase Pro has the easiest app to use on computer or mobile. If you are looking for smaller-cap altcoins and non mainstream cryptos, then Binance is probably your best bet. Either way, it is a relief that most of these crypto trading bots are fully usable within the big crypto trading exchanges on the market.
It is becoming increasingly clear that cryptocurrencies are becoming a viable investment asset and a part of a well-balanced and diversified portfolio. There are always going to be those that oppose cryptos, and that’s fine. For the ones that do believe in trading cryptocurrencies, crypto trading bots are an interesting trading tool to add to your repertoire. Since crypto exchanges are open 24 hours per day, a crypto trading bot can act as a failsafe in case markets tank overnight.
There is a lot of price action in cryptos while you are asleep at night, so wouldn’t it be nice if you set a sell order whenever the price of crypto falls by 10% or more? I won’t tell you that all crypto trading bots will make you a profit. Nothing is certain or guaranteed in trading! But what the trading bots can provide is peace of mind and the potential for passive income around the clock!