Earn Passive Income in Cryptocurrency – part 2
This part of the Cryptocurrency Passive Income guide will talk about crypto trading bots and how they work, as well as if they can be profitable.
What are crypto trading bots?
As the name suggests, they are automatic robot trading algorithms that trade for you. All you need to do is give them 24/7 internet access and a trading strategy, and they will do the work for you.
There are several types of bots available on the market, depending on what you want to do. They include regular trading bots that trade on the desired exchange as well as arbitrage bots, which make a profit off of the price difference between exchanges.
Are crypto trading bots profitable?
In order to start profiting from bot trading, you will ideally need a healthy stack of crypto to start with. If you are running an arbitrage bot, you would need cryptocurrencies on multiple exchanges. ,
While some people have made a fortune passively through these bots, many have lost their crypto investments as well. It all depends on how you adapt the bot to the market. There are strategies that work well for bullish markets but do poorly in bearish markets, and vice versa. For this reason, you need to develop or copy strategies and then switch them out based on the major trend.
Which trading bot to pick?
Quite a few crypto trading bots have recently emerged on the market, claiming they can ensure massive profits. While there is no doubt that utilizing machine learning can make a profit if done well, we can conclude that bots only enable the possibility of passive income while creating it has to do with you creating your own strategy (or copying one).
A couple of most well-known cryptocurrency trading bots on the market are:
Gunbot, which offers trading on eight different exchanges. It costs 0.02 BTC up to 0.15 BTC to buy it.
Haasbot is an automatic trading bot that comes with monthly subscriptions that start from 0.073 BTC.
Profit Trailer is a bot that specializes in average-down strategies. It starts at $35 per month.
Ultimately, you should pick your bot based on the exchange you want to use it on, the monthly fee as well as based on if the strategy you want to use is available on the particular bot.
Should you use a crypto trading bot?
The reality is that bots are here to work as tools rather than as fully independent entities that just earn massive profits. If that were the case, everyone would use them. Using trading bots can be extremely profitable, but only with the right strategies.
The best crypto trading bots that earn the best profits are certainly ones that you have never heard about, nor you will. Traders who use such bots have absolutely no incentive to share the information. However, there are many possibilities when it comes to earning a passive income through bots, and many strategies can be viable. Backtesting is a major key in finding the strategy that suits you and the market cycle at that particular moment.
Make sure to watch the rest of the Crypto Passive Income series, where we will talk about other ways of earning a passive income through cryptocurrencies.