As the world of cryptocurrency trading evolves, so does the technology that supports it. In recent years, we have seen a surge of AI tools like ChatGPT integrated into various aspects of the crypto landscape. This development, while exciting, is not without its drawbacks.
A recent survey by my exchange Bitget found that 80% of crypto traders admitted to having bad experiences with ChatGPT. Specific examples included false investment advice, disinformation and falsification of facts.
Misleading investment recommendations
AI is not an omnipotent entity but rather a man-made tool. AI, and more specifically ChatGPT, operates within parameters set by human developers, and while its capabilities are impressive, they are not without limitations. Our society’s understanding of these tools is still maturing and it is crucial to recognize their potential risks, especially when it comes to financial decisions.
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Seeking better customer experience and innovation, many fintech companies are exploring the potential benefits of incorporating AI into their operations. Experiments with using AI for client inquiries, design, copywriting, and coding, however, have shown that human talent still outperforms AI most of the time.
Bitget tried using ChatGPT to handle routine customer requests. Initially, we were impressed with his proficiency in parsing and compiling information. However, as we delved into more complex queries, the cracks began to show. Despite being built on extensive data, ChatGPT sometimes offers misleading, distorted, or incomplete information, as a recent internal test reminded us.
When our staff asked about market sentiment around a lesser-known altcoin, ChatGPT mistakenly associated the coin’s name with a popular internet meme. The resulting answer, while amusing, may have been taken seriously by those who are new to the market and rely heavily on third-party programs.
Another inquiry came from a user who asked why Terras LUNA was trading 95% lower than last year after said user received a list of potential coins from ChatGPT to consider. The question was: what are the 30 cryptocurrencies that I can consider investing in based on the criteria of best team, tokenomics, security and reliability?
When I tried to ask the same question and clarify why LUNA was on the recommended list, ChatGPT started offering another coin, quickly changing my mind.
The fact is that language models such as GPT-4 and GPT-3, used in ChatGPT, have access to an outdated information base, which is unacceptable in the trading market, where speed and relevance matter. For example, FTX, the cryptocurrency exchange that went bankrupt in November 2022, is still safe and sound if ChatGPT is to be believed.
Though the exchange collapsed nearly a year ago, ChatGPT’s data will only last until September 2021, meaning FTX is still assumed to be a going concern.
The importance of human experience in cryptocurrency trading
The cryptocurrency landscape is complex and constantly evolving. It requires keen intuition and human intuition to navigate its many twists and turns. AI tools, while robust and resourceful, lack the human touch needed to accurately interpret market nuances and trends. It is important to exercise caution, diligence and critical thinking. In the pursuit of technological progress, both companies and individuals must not overlook the importance of human intuition and expertise.
As a result, we have chosen to limit our use of AI tools such as ChatGPT. Instead, we place greater emphasis on a blend of human experience and technological innovation to better serve our customers.
That’s not to say that AI tools don’t have their place in the crypto sphere. Indeed, for basic queries or simplifying complex topics, they can prove invaluable. However, they should not be seen as a substitute for professional financial advice or independent research. It is essential to remember that these tools, while powerful, are not foolproof.
In the world of cryptocurrencies, every piece of information has weight. Every detail can impact investment decisions, and in this high-stakes environment, one misstep can have significant consequences. So while AI tools can provide quick answers, it’s crucial that you cross-check this information from other trusted sources.
Also, data privacy is another critical aspect to consider. While AI tools like ChatGPT aren’t inherently a privacy risk, they can be misused in the wrong hands. It is essential to ensure that the data provided is secure and that the artificial intelligence tools used adhere to strict privacy guidelines.
Ethical considerations and data security
However, AI tools like ChatGPT are not the enemy. They are powerful tools that, when used responsibly and in conjunction with human experience, can significantly enhance the cryptocurrency trading experience. They can explain complex jargon, provide quick answers, and even offer rudimentary market analysis. However, their limitations should be recognized and a responsible approach to their use is essential.
In our journey with ChatGPT, we’ve learned that AI tools are only as effective as their latest update, training, and data they’ve received. They may not always be up to date with the latest developments or understand the subtleties of a dynamic and often volatile cryptocurrency market. They also cannot provide empathy, a quality often needed in the uptight world of cryptocurrency trading.
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The integration of AI into cryptocurrency trading also raises ethical questions, especially when it comes to making decisions. If a user makes a financial decision based on misleading information provided by an AI tool, who is responsible? It’s a question the industry is still grappling with.
Then there is the issue of data security. In an era of data breaches and cyberthreats, any technology that collects, stores and processes user data needs to be scrutinized. While AI tools like ChatGPT aren’t inherently a privacy risk, they aren’t immune to abuse or hacking. It is crucial to ensure that these tools have robust security measures in place to protect user data.
It’s also worth noting that while AI tools can crunch numbers and provide data-driven insights, they can’t replicate the instincts experienced traders often rely on. The kind of instinct honed over years of trading, observing market trends and understanding the psychology of other traders. This is something that AI, for all its sophistication, cannot learn or emulate.
While AI tools like ChatGPT offer exciting possibilities for the cryptocurrency industry, they shouldn’t be seen as a magic wand. They are tools to help, not replace people, intuition and financial savvy. As we continue to explore the potential of AI in the cryptocurrency world, we need to be aware of these limitations and potential risks.
Grace Chen He is the CEO of crypto derivatives exchange Bitget, where he oversees market expansion, corporate strategy and business development. Prior to joining Bitget, he held executive positions at Fortune 500 unicorn company Accumulus and venture-backed VR startups XRSPACE and ReigVR. She was also an early investor in BitKeep, Asia’s leading decentralized wallet. She was awarded in 2015 as Global Shaper by the World Economic Forum. She graduated from the National University of Singapore and is currently pursuing an MBA from the Massachusetts Institute of Technology.
This article is for general informational purposes only and is not intended to be and should not be relied upon as investment or legal advice. The views, thoughts and opinions expressed herein are those of the authors only and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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