Key takeaways

AI-powered crypto trading bots use machine learning to make smarter, faster trading decisions — without emotions.

Setting up a bot involves choosing a platform, connecting your exchange, configuring strategies and running backtests.

Bots can run 24/7, react to data instantly and are ideal for passive income seekers and active traders.

While powerful, they’re not “set-it-and-forget-it” tools. You’ll need to monitor performance and tweak strategies over time.

Understanding your goals (long-term investing, day trading, etc.) helps you choose the right bot and strategy.

Crypto markets move fast and rarely sleep. That’s why AI-powered crypto trading bots are no longer a novelty. These bots use machine learning to analyze data, identify patterns and execute trades in real time, often faster and with more discipline than human traders.

From beginners looking to automate simple strategies to professionals deploying predictive models, AI bots offer a scalable way to participate in volatile markets.

This guide explains how to build the best AI trading bots for crypto, how AI trading bots work, how to set them up correctly and what to avoid for long-term performance, not just short-term automation.

What are AI-powered crypto trading bots?

AI-powered crypto trading bots are programs that automatically buy and sell crypto assets based on machine learning algorithms, rather than fixed rules. These bots ingest large volumes of historical and real-time data — price action, order book depth, volatility, even social sentiment — and use that information to detect opportunities.

Unlike traditional bots that act only when predefined conditions are met, AI bots can adjust dynamically. For example, a bot trained on past market behavior might delay execution during uncertain conditions or increase position sizing during high-confidence periods. This adaptability makes them particularly useful in high-frequency, volatile environments where speed and objectivity matter.

Advanced platforms like Freqtrade and Trality allow users to import custom-trained models, while others like Stoic by Cindicator use in-house quant research to automate portfolio balancing. The core advantage lies in their ability to reduce emotional trading and operate around the clock without fatigue.

How to set up an AI crypto trading bot

Getting started with an AI-powered crypto trading bot is easier than ever, especially with today’s user-friendly platforms. 

But behind the ease of clicking “Start” lies a setup process that determines whether the bot performs reliably or becomes a source of costly errors. Proper setup ensures alignment with market conditions, trading goals and risk tolerance.

Below are a few key points to bear in mind while setting up crypto trading bots:

Choose a platform that supports AI functionality. Tools like Freqtrade, Trality and Jesse AI allow importing machine learning models. Others like 3Commas, Pionex and Cryptohopper focus on user-friendly automation and visual strategy builders.

Connect the bot to an exchange using API keys. Security settings should always disable withdrawal permissions, enable 2FA and restrict access via IP whitelisting where possible.

Configure the strategy. This includes defining trade pairs, order sizes, stop-loss and take-profit rules, cooldowns and maximum concurrent positions. Some platforms support prebuilt logic, while others allow full scripting with Python.

Backtest the strategy using historical data. Platforms like 3Commas, Cryptohopper and Freqtrade support robust backtesting to measure risk-adjusted performance across different market phases.

Deploy in live conditions with minimal capital. Initial live testing should include real-time monitoring of execution logs, fill prices, slippage and fees. Alerts should be set for failed orders or drawdowns. Most bots support integrations with Telegram, Slack or email for notifications.

Choosing the right AI bot

Selecting the right AI-powered crypto trading bot is a foundational step toward building a sustainable, automated trading strategy. 

The decision should align with the desired strategy complexity, technical skill level, risk appetite and required exchange support. Bots differ not only in interface and pricing but also in how deeply they incorporate machine learning and adaptive logic.

Some bots, like Pionex and Stoic by Cindicator, prioritize simplicity and automation with minimal configuration, targeting users who prefer passive execution or prebuilt strategies. 

Others, such as Freqtrade, Trality and Jesse AI, offer full control, deep customization and support for importing externally trained AI models — catering to users with programming experience or quantitative backgrounds.

Strategy fit: Pionex and Bitsgap could be ideal for grid and dollar-cost-averaging (DCA) strategies. For trend-based or breakout strategies, 3Commas supports custom logic with popular indicators. Freqtrade and Jesse AI are best for those building predictive models with Python.

Level of AI support: Some bots like Stoic by Cindicator use built-in quant models. Others like Trality and Freqtrade allow importing externally trained machine learning models for advanced control.

User experience: No-code users can explore platforms like Cryptohopper and Kryll. Intermediate users often prefer 3Commas. Developers will benefit from Trality’s Python IDE or Freqtrade’s scripting interface.

Exchange compatibility: Most bots support Binance, Kraken, KuCoin, Coinbase and Bybit. Platforms such as 3Commas and Bitsgap offer multi-exchange support and are especially popular among copy-trading users, allowing them to mirror professional strategies across multiple accounts in real time.

Backtesting capabilities: Trality, Cryptohopper and 3Commas include visual backtesting. Jesse AI and Freqtrade offer deeper simulations with latency and slippage modeling.

Security features: Look for bots with encrypted API key storage, IP whitelisting and two-factor authentication. These are standard on 3Commas and Trality.

Pricing models: Pionex is free to use. Platforms like 3Commas and Trality run on subscriptions. Freqtrade and Jesse AI are open-source but require technical setup.

Common mistakes while using AI bots and how to avoid them

Despite the availability of powerful AI tools, some mistakes still lead to poor outcomes. These errors typically arise from misconfiguration, over-optimization or lack of oversight.

Overfitting backtests: Many bots look great on paper but fail when they go live. Use walk-forward testing and avoid strategies that only succeed in past conditions.

Relying on marketplace bots: Marketplace strategies from platforms like Kryll or Cryptohopper often lack adaptability. Always test and tweak before deployment.

Weak risk controls: Skipping stop-losses or using oversized positions can wipe out capital. Bots like Freqtrade and Trality let users define precise risk limits. Make sure to use them.

Ignoring trading costs: Backtests often ignore slippage and fees. Jesse AI and Freqtrade offer built-in tools to simulate these costs more accurately.

Lack of monitoring: Bots need regular checks. Platforms like 3Commas and Trality support real-time alerts for failed trades or sudden drawdowns.

Overleveraging: Using high leverage on exchanges like Bybit or Binance Futures (crypto derivative exchange) can lead to liquidation. Apply strict limits from the start.

Wrong market fit: DCA works well in declining markets; breakout bots don’t. Platforms like Stoic and Kryll offer filters or pause triggers to prevent misfires.

Avoiding these common errors requires thoughtful setup, continuous validation and disciplined risk controls. AI bots can enhance performance but require human oversight, strategic clarity, and technical awareness to deliver consistent results.

The future of crypto AI trading

AI crypto trading is entering a new phase where real-time learning replaces static strategy templates. Instead of relying on predefined signals, emerging trading systems use reinforcement learning and online model retraining to adapt continuously to shifting market dynamics. 

Platforms such as Freqtrade, combined with cloud-native tools like Google Vertex AI or AWS SageMaker, enable this shift by supporting pipelines that monitor live order books, price volatility and macroeconomic indicators to automatically refine decision-making thresholds during active trading.

A major evolution is the integration of large language models (LLMs) into trading workflows. Unlike traditional bots limited to charts and price data, LLM-enhanced agents interpret unstructured information — central bank statements, tokenomics updates, SEC filings or even Discord announcements — and convert it into actionable insights. 

Early implementations are emerging in institutional quant desks and experimental tools like Delphi AI and Kaito, which allow bots to pause or adjust positions based on narrative sentiment, regulatory shifts or reputational risk events in real time.

AI is also expanding its footprint onchain, with smart contract-based agents executing trades, managing liquidity and optimizing DeFi yield in a fully decentralized manner. 

Projects like Fetch.ai are developing AI agents that operate autonomously across protocols without human intervention. These agents interact directly with AMMs, lending pools and governance protocols, ushering in an era where the lines between algorithmic trading, protocol participation and AI reasoning are entirely blurred within the blockchain itself.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Tether Investments — the investment arm of leading stablecoin issuer Tether — acquired additional shares in Juventus Football Club.

According to an April 24 announcement, with its latest investment, Tether brought its total participation in Juventus to over 10.12% of the issued share capital, representing 6.18% of the voting rights. The investment follows the firm’s initial acquisition of 8.2% of the issued shares.

Tether’s second Juventus investment announcement’s image. Source: Tether

Tether CEO Paolo Ardoino said that the investment is not only a short-term financial maneuver but “a commitment to innovation and long-term collaboration.” He added:

“We believe Juventus is uniquely positioned to lead both on the field and in embracing technology that can elevate fan engagement, digital experiences, and financial resilience. We’re excited about the opportunities ahead.”

Founder of Obchakevich Research, Alex Obchakevich, told Cointelegraph that Tether’s Juventus stake increase is an “attempt to prove to non-crypto investors and users that the company is much more than just a stablecoin.” Investors may also not be the only target:

“It is also a way to improve your image with regulators (especially in the European Union) by demonstrating transparency and stability.“

Obchakevich added that he believes “Tether is trying to return to the European market” after losing access due to compliance issues with the local Markets in Crypto-Assets Regulation (MiCA). Leading crypto exchange Binance delisted Tether’s stablecoin, USDt (USDT), in the European Economic Area (EEA) earlier this month, and now a “stake in Juventus is one of the options for returning to the EU market.”

What is Juventus?

Juventus is a professional soccer club based in Turin, Italy, widely regarded as one of the most successful and popular teams in the history of Italian and European soccer. Founded in 1897, Juventus, commonly known as “Juve,” competes in Serie A, Italy’s top soccer league.

The club has won numerous national and international titles, including multiple Serie A championships, Coppa Italia trophies and UEFA competitions. Tether announced its intention to work closely with the soccer club’s leadership and stakeholders, as well as provide further financial support:

“As a further demonstration of its long-term commitment, Tether is also open to participating in any future equity injections to help strengthen Juventus’s financial foundation and avoid dilution of its position.“

Tether is on a shopping spree

This is just the latest in a long series of investments by Tether. According to reports from earlier this month, Brandon Lutnick, chair of investment banking firm Cantor Fitzgerald, is partnering with SoftBank, Tether and Bitfinex to create a $3 billion crypto acquisition company.

Tether is also involved in Bitcoin (BTC) mining. The firm recently announced the intention to deploy its existing and future Bitcoin hashrate to Ocean’s Bitcoin mining pool to strengthen the network’s decentralization.

Tether also just bought 8,888 Bitcoin in the first quarter of 2025. Data from the onchain analytics platform Arkham Intelligence shows that the firm currently holds 95,721 BTC, worth roughly $8.89 billion at the time of writing.

In late March, Tether also invested €10 million ($11.4 million) in the Italian media company Be Water. Some of the investments are already paying off, with Canadian YouTube alternative Rumble recently launching its wallet with support for Tether’s USDT stablecoin. This comes after Tether invested $775 million in Rumble in late 2024.

Tether’s recent spending spree is likely at least partly due to the company’s intention to hedge against a falling US dollar. Still, Obchakevich thinks this is not the whole story since “companies like Tether are playing for the long haul, and a situational drop in the dollar in the market due to tariffs would not be a reason to spend money quickly.” He said:

“The deal with Juventus is not a situational story, I’m sure it was prepared long before the tariffs and the dollar fell.“

Opinion by: Igor Zemtsov, chief technology officer at TBCC

Crypto security is a ticking time bomb. Updatable firmware might just be the match that lights the fuse.

Hardware wallets have become the holy grail of self-custody, the ultimate safeguard against hackers, scammers and even government overreach. There’s an inconvenient truth, however, that most people ignore: Firmware updates aren’t just security patches. 

They’re potential backdoors, waiting for someone — whether a hacker, a rogue developer or a shady third party — to kick them wide open.

Every time a hardware wallet manufacturer pushes an update, users are forced to make a choice. Hit that update button and hope for the best, or refuse to update and risk using outdated software with unknown vulnerabilities. Either way, it’s a gamble. 

In crypto, a bad gamble can mean waking up to an empty wallet.

Firmware updates aren’t always your friend

Updating firmware sounds like common sense. More security! Fewer bugs! Better user experience!

Here’s the thing: Every update is also an opportunity not just for the wallet provider but for anyone with the power, or motivation, to tamper with the process.

Hackers dream of firmware vulnerabilities. A rushed or poorly audited update can introduce tiny, almost imperceptible flaws — ones that sit in the background, waiting for the right moment to drain funds. And the best part? Users will never know what hit them.

Then there’s the more unsettling possibility: deliberate backdoors.

Recent: Hardware wallet Ledger helps competitor Trezor resolve security vulnerability

Tech companies have been forced to include government-mandated surveillance tools before. What makes anyone think hardware wallet makers are exempt? If a regulatory agency — or worse, a criminal organization — wants access to private keys, firmware updates are the perfect attack vector. One hidden function. One disguised line of code. 

That’s all it takes. Still think firmware updates are harmless? 

Firmware vulnerabilities are already being exploited

This isn’t some far-fetched, doomsday scenario. It has already happened.

Ledger, one of the biggest names in crypto security, had a major security crisis in 2018 when security researcher Saleem Rashid exposed a vulnerability that allowed attackers to replace Ledger Nano S firmware and hijack private keys. Nearly 1 million devices were at risk before a fix was rolled out. The scary part? There was no way for users to know if their devices had already been compromised.

In 2023, OneKey suffered a similar nightmare. White hat hackers demonstrated that its firmware could be cracked in mere seconds. No crypto was lost — this time. But what if real attackers had found the flaw first?

Then came the “Dark Skippy” exploit, taking firmware-based attacks to an entirely new level. With just two signed transactions, hackers could extract a user’s entire seed phrase — without setting off a single alarm. If firmware updates can be manipulated this easily, how can anyone be sure their assets are safe?

The hidden price of updatable firmware

To be fair, not all firmware updates are security disasters. Ledger uses a proprietary operating system and secure element chips for added protection now. Trezor takes an open-source approach, allowing the community to scrutinize its firmware. Coldcard and BitBox02 give users manual control over updates, reducing — but not eliminating — risk.

Here’s the real question: Can users ever be 100% sure that an update won’t introduce a fatal flaw?

Some wallets have decided to eliminate the risk altogether. Tangem ships with fixed, non-updatable firmware, meaning that its code can never be altered once the device leaves the factory. No updates. No patches. 

Of course, this approach has its trade-offs. If a vulnerability is discovered, there’s no way to fix it. But in security, predictability matters. 

Real crypto security means taking back control

The crypto market was worth $2.79 trillion as of March 2025. With that much money on the table, cybercriminals, rogue insiders and overreaching governments are always looking for weak points. Hardware wallet makers should be laser-focused on security.

Choosing a hardware wallet shouldn’t feel like gambling with private keys. It shouldn’t involve blind trust in a corporation’s ability to push updates responsibly. Users deserve more than vague reassurances. They deserve security models that put control where it belongs — with them.

Security isn’t about convenience. It’s about control. Any system that requires trusting unknown developers, opaque update processes or firmware that can be changed at will? That’s not control. That’s a liability.

The only real way to keep a hardware wallet safe? Remove the guesswork. Strip away the blind trust. Always research the developers’ backgrounds, check their track record for security incidents, and see how they’ve handled past vulnerabilities. Stick to verifiable facts — security should never be based on assumptions.

Opinion by: Igor Zemtsov, chief technology officer at TBCC.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.