Robo-advisors and AI trading bots which one should you choose?

by Trey Huynh July 4, 2024

Did you ever find yourself annoyed by that automated voice from customer service? Tired of it telling you to press one instead of two? If so, then rest assured, after reading this article, that will not change. But, you'll also discover that not all automation is bad. In fact, certain things you care about would work best when automated, like money, for example.

Money tends to move at a rapid pace, but it's now faster than ever thanks to online banking and cryptocurrency. When something is fast, we need to stay ahead of it for gains. Especially in the case of crypto, automated investment and trading generates more traction every year. Two dominant solutions in the market are crypto robo-advisors and AI crypto trading bots.

While both aim to simplify investment, they differ significantly in their approach. Crypto robo-advisors cater to accessibility and convenience whereas AI crypto trading bots require preliminary setup and some technical knowledge.

Let's take a closer look at these solutions and determine which is best suited for your financial objectives.

What are AI crypto trading bots and how do they work?

AI crypto trading bots are essentially algorithms programmed to identify patterns and market trends and detect market signals that may not be apparent to us, the human traders. Using those features they can execute trades and make strategic adjustments based on market conditions.

An AI crypto trading bot remains on constant lookout for potential gains. It keeps a close eye on the market and scans for opportunities. Since AI crypto trading bots lack human emotion, they make decisions according to the changes in the market and are unaffected by rumors.

Keep in mind that this also comes with higher risks since AI crypto trading bots operate on numbers and may disregard implicit factors like company scandals or changes in leadership.

What are crypto robo-advisors and how do they function?

Crypto robo-advisors operate on a larger scale than AI crypto trading bots. Most investors will find them as automated platforms designed to assist users in managing their cryptocurrency portfolios.

Unlike AI trading bots, a crypto robo-advisor follows predefined algorithms and execute trades based on set strategies. They evaluate your investment goals and take into consideration crucial factors like your risk tolerance, on-chain data, market conditions to recommend a diversified approach.

You can think of crypto robo-advisors as your GPS. The destination here is your investment goal. Your GPS will always provide the most efficient route to where you want to be, and can adjust it according to the changes in traffic.

Crypto robo-advisors offer a tremendous sense of automation, meaning you would seldom need to interact with the platform, unless it's to collect on your dues. Some also come with auto-rebalancing, resulting in a hands-off experience.

Which is more convenient? crypto robo-advisors or AI trading bots?

You don't have to be an investor to agree that time is money, and convenience plays as a crucial factor for those who value efficiency in their investments.

The choice often boils down to trading goals and personal preferences, but crypto robo-advisors offer simplicity and ease of use. Setting up is less complicated, and once started, your crypto robo-advisor would require little to no intervention, making it appealing to passive investors or those new to cryptocurrency.

AI crypto trading bots, on the other hand, focus on quick gains and opportunities. They often come with more customizations, but also higher risks, making them a first choice for those who look to capitalize on market fluctuations.

Invest in more than just crypto, invest in yourself

Whether you are result-oriented, or prefer a steady race and watch your money grow (while also watching Netflix), you can't ignore the fact that time is the most important currency. Crypto robo-advisors allow you to enjoy your favorite things while managing your portfolios, something that not too long ago, was a wild fantasy.

Check us out while you're here! Explore the most advanced technology investy.ai employs and take a close look at our innovative features, including seamless exchange integration and our massive trading engine designed to overcome any financial terrain you may choose to tread.