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Robo-advisors are finding their way into the realm of cryptocurrency
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Robo-Advisors May Change the World of Cryptocurrency

While robo-advisors haven’t been around for a long time, they are quickly proving their effectiveness when it comes to trading a wide range of assets. The same algorithms that are used for their current portfolios could be applied to cryptocurrency.

Better than humans

One of the main advantages of robo-advisors is the fact that their decisions are purely based on analysis. They have no emotions to cloud their judgment or to delay their reactions, and this can make a huge difference in a highly dynamic market. It is also important to mention that these advisors can effectively work around the clock and that they are constantly gathering data that they can use in their future transactions.

While their algorithms are preprogrammed, they can also analyze a market and make changes in their strategies based on general trends and other factors.

Working with machines for a better future

Robo-advisors are complex machines, however, working with one isn’t much more difficult than setting up a profile on a social network. The user must basically fill out a form meant to help the machine (or rather, the application) assess their risk profile. Using this information, the advisor then selects a number of mutual funds and ETFs in which it will invest.

Generally speaking, the algorithm is based on modern portfolio theory, and as a result, the advisor will choose uncorrelated assets in order to minimize risk.

More power to the people

In a world where cryptocurrency is slowly becoming as powerful, if not more powerful than normal currency, the ability to carefully invest in order to maximize profit is extremely powerful. And robo-advisors are the perfect way to ensure that the odds are in your favor.

These algorithms have been around for a while, even when it comes to those capable of trading cryptocurrency, however, access to them has been restricted. However, we are now seeing more and more free robo-advisors capable of trading cryptocurrency online. This having been said, there are also paid options for those looking to have a bit more control over their transactions.

How useful is a robo-advisor when it comes to cryptocurrency?

The algorithm used to invest money and trade assets has not changed much in order to integrate this new market. Robo-advisors that have cryptocurrency in their portfolios are popping up more and more often of various websites, and this means that they are still evolving.

Considering the current state of these algorithms, they are just as efficient at trading cryptocurrency such as Bitcoin as they are at trading various other assets. However, digital assets are more dynamic than physical ones and it is hard to determine what will happen in the future. For this reason, robo-advisors will need to constantly evolve in order to stay one step ahead of the game.

Overall, robo-advisors that have cryptocurrency in their portfolios are designed to fill the need for asset management in the world of digital assets. The algorithms that power them make these advisors faster and less prone to making mistakes when compared to humans. As the popularity of cryptocurrency grows, they are prone to change the way we look at it.

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