Blockchain technology is considered one of the most revolutionary innovations in recent years. It has recently gained widespread adoption and is one of the main reasons why the cryptocurrency sector has grown so much in such a short period of time. Cryptocurrency is a difficult concept to understand and many struggle to understand how this technology works. However, major advancements have recently taken place in the fields of artificial intelligence (AI) and machine learning (ML), which led to the introduction of ChatGPT.
This new technology works hand in hand with cryptocurrency and offers a powerful tool to traders. This guide will explain what ChatGPT is and how it can help crypto traders make more informed decisions regarding their financial choices.
What is ChatGPT?
ChatGPT is an artificial intelligence chatbot developed by a company called OpenAI. The bot was launched in late 2022 and has since received several updates that have impressed the world. With the launch of the GPT-4 update, ChatGPT was able to move high school and law exams. According to the results, he ranked among the top 10% of participants. Over time, it is likely that it will continue to develop and become even more advanced. It already allows users to enter any text, such as questions or prompts; in return, it provides real-time responses.
Some fear that ChatGPT is “creepy” and could cause “internet disruption.” Meanwhile, others consider it a very useful tool. Of course, potential misuse is an obvious concern, which is why big tech names are demanding regulations for AI. Abuses aside, ChatGPT could be a very powerful tool when it comes to investment in digital assets.
However, this could only scratch the surface of what machine learning and artificial intelligence can bring to traders. That’s why we’ve compiled a list of 7 ways ChatGPT can help you make informed crypto decisions.
A List of 7 Ways ChatGPT Can Help You Make Informed Crypto Decisions
1. Sales training
ChatGPT was trained on a huge database, which means it has access to significant amounts of data. Therefore, he knows the majority of topics and concepts in the crypto market. This may include market trends and details about digital assets, such as market capitalization, etc.
This allows ChatGPT to answer questions on almost any topic. This can help crypto newcomers learn more about the industry and how it differs from, for example, banking. He is a well-trained teacher of almost any concept that words can explain. Users can ask detailed questions to learn more about any topic and educate themselves.
2. Market Analysis
ChatGPT can analyze market conditions and provide analytics that traders can benefit from, leveraging its access to real-time data when users subscribe to the paid version of ChatGPT. The free version of ChatGPT does not currently have access to real-time data – provided by Microsoft’s Bing search engine – but is expected to do so in the future. This allows the chatbot to analyze current market conditions, making it a valuable tool for traders.
In addition to this, ChatGPT can also analyze past market conditions and identify patterns that are likely to recur. Although its knowledge is no longer limited to data through 2021, it continues to provide useful information for traders looking to improve their understanding of cryptocurrency.
3. Trading Strategies
ChatGPT can also create trading strategies for aspiring crypto traders. By analyzing market conditions and receiving data on the trader’s goals, ChatGPT can create entire strategies. These would be personalized trading strategies, based on your financial goals, risk tolerance, etc. ChatGPT can analyze your contribution, compare it with the strategies it knows, find the one that suits you best and recommend it.
4. Price prediction
Another potential use case for ChatGPT in cryptocurrency trading is providing price predictions. While this is technically true, traders should be aware of the risks associated with this demand. Price predictions are extremely unreliable, even when made by human crypto traders with a deep understanding of the market. If you ask the artificial intelligence for a price prediction, it will be able to offer you one, however, this should be taken as a recommendation, not financial advice.
That being said, for forecasting, traders can use something called JAMES invites. It was created to make predictions about the future of any subject. Of course, the results are not necessarily accurate. However, this is true for all predictions entering and exiting crypto.
The reason we don’t recommend it is because ChatGPT could be delusional. Therefore, it is not recommended to use the tool – or anyone’s predictions – without conducting your own research. The crypto industry is too volatile and unstable to do this. In other words, if you request a prediction from Chat GPT, use the results for educational purposes only.
5. Risk management
With access to digital asset data, ChatGPT can also offer risk management advice. It can help you manage your risk exposure by providing real-time risk analysis and alerts – again, when you use the paid version of the tool. AI is extremely proficient at spotting patterns. You can use this to your advantage and make better informed decisions. But again, it is essential that you also conduct your own research, especially when it comes to risk management.
6. Portfolio management
Portfolio management is another area where ChatGPT can be useful. It can help traders manage their crypto portfolios by offering real-time portfolio tracking and analysis. It can also track the performance of your assets and offer recommendations regarding its rebalancing. This would be very helpful for those new to self-care.
7. Crypto News Analysis
Finally, ChatGPT could monitor crypto news for you. By constantly monitoring the internet using the paid service, it stays up to date with the latest crypto news and developments. As such, it will be able to alert you, offer you a modification of trading strategies for example. News constitutes an important part of fundamental analysis of the cryptocurrency sector.
Initially, ChatGPT only had access to information until the end of 2021. However, with its latest update, it can now browse the web directly. This update granted the AI chatbot access to Bing, allowing it to report new information. However, it is important to note that this feature will be fully rolled out in the future.
How does ChatGPT work?
ChatGPT uses a deep neural network trained using large datasets. The neural network is made up of a series of interconnected nodes, called artificial neurons. Thanks to them, the network can process information and make decisions based on this information. These neurons are also divided into several layers, which allow the robot to process and analyze the entered text. After that, it can generate textual output in response. The deep structure of the network allows it to learn, generate text and notice patterns.
During training, the robot was given countless examples of input-output pairs. This allowed him to learn the relationship between inputs and outputs in a conversation. The material used is from various websites, books and social platforms. Developers then filtered and organized the data to ensure its quality.
The end product is a robot that generates probabilities related to different possible responses when an input prompt is given. It will then select the one with the greatest probability of offering the correct answer to the question. It will base its decision on data, training and the neural network.
Advantages and disadvantages of ChatGPT
ChatGPT has impressed everyone from tech experts to investors and even politicians. After all, it has many benefits, use cases and applications. However, it has some drawbacks, as we will see. Here are the pros and cons of ChatGPT.
Advantages of ChatGPT:
- ChatGPT is very easy to use
- It offers extremely fast human responses
- it’s free to use
- It can create or debug code, write song lyrics, story prompts, and more.
- He can explain difficult concepts to students
- It can answer FAQs, offer customer support services and much more, thereby reducing costs for businesses.
Disadvantages of ChatGPT:
- ChatGPT still lacks common sense and has limited understanding
- The robot may look like a human, but it does not understand the text it processes
- This may generate misleading or incorrect information
Combining AI and crypto
ChatGPT is a new but powerful tool that has already provided a number of interesting use cases. In the crypto industry, it can be used to track crypto news and crypto market trends. It can track Bitcoin (BTC) price, market cap, and other details. The same goes for virtually every other digital asset. Although crypto traders can use it to predict prices and develop trading strategies, remember that it is not reliable.
Does ChatGPT have a crypto coin?
No, ChatGPT is not associated with any cryptocurrency or blockchain. However, OpenAI has considered its uses in the crypto/blockchain space.
Can you use ChatGPT for trading?
As of May 2023, ChatGPT can only serve as a tool for creating trading strategies and algorithms. It cannot serve as a trading robot at this time. Whether or not this will be possible in the future remains to be seen.
Is ChatGPT a blockchain?
No, ChatGPT is a network of artificial nodes designed to resemble a human brain. However, it does not run on blockchain technology and has no direct connection with it.
Who owns ChatGPT?
ChatGPT is owned by OpenAI, the same company that developed the bot. OpenAI was co-founded by Elon Musk, among others, but Musk has since resigned from the board.
Can ChatGPT predict cryptocurrency prices?
Technically, ChatGPT can provide crypto price predictions. However, price predictions might not be reliable. The crypto industry is too volatile and requires in-depth knowledge of market trends and behavior.
Can ChatGPT help with cryptocurrency trading?
ChatGPT can help you with cryptocurrency trading by creating trading strategies that traders can follow. As of May 2023, this is the best way to use it in crypto. It cannot trade directly as a trading robot, and it should not be trusted with price predictions yet.