Utilizing Artificial Intelligence in Cryptocurrency Trading: a Literature Review

Abstract

The rapid growth and unique advantages of cryptocurrencies have made them an attractive asset for investment portfolios. However, investing in cryptocurrencies comes with risks, especially market volatility. This paper explores the benefits of Bitcoin’s market dominance, including liquidity, stability, and practical utility. It also reviews multiple previous articles about using Artificial Intelligence (AI) for cryptocurrency trading to enhance the feasibility and profitability of cryptocurrency investments, focusing specifically on Bitcoin. It further discusses the potential advantages of using AI in developing predictive models for market trends and managing grid trading strategies to stabilize returns and lower risks. While research on the application of grid trading strategy with AI in the cryptocurrency market is limited, existing studies in other asset classes demonstrate the effectiveness of AI-based methods. Finally, this paper outlines novel potential future research that aims to integrate AI with the Grid Trading Strategy. This integration seeks to enhance the sustainability of cryptocurrency investments while simultaneously amplifying their profitability.