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Diligently checking the crypto markets on a daily—or perhaps hourly—basis: it’s an adrenaline rush, but is it the most efficient way to trade? If efficiency is your goal, algorithmic crypto trading bots can help.
What are crypto trading bots?
Crypto trading bots are computer programs that create and submit buy and sell orders to exchanges based on the rules of a pre-defined trading strategy. For example, a very simple trading bot might be programmed to sell ETH when the crypto's price reached a certain threshold.
In short, crypto trading bots enable trading based on data and trends—not on emotional impulse. Ultimately, this usually grows their profits, minimizes their risks, and limits their losses across exchanges. Furthermore, bots can produce passive income 24 hours a day. Whether you’re sleeping, biking, giving a presentation, whatever: you could also be earning from automated trades.
Automated trading is supported by a growing number of platforms, but we’ve done the research and presented our favorites below, along with some practical context and advice about making them work for you.
What are the best free crypto trading bots?
Best free bitcoin bot for beginners: Blackbird Bitcoin Arbitrage
A bitcoin (BTC) arbitrage bot is a computer program that examines and compares bitcoin prices across exchanges in order to make automated trades that take advantage of price discrepancies. For example an arbitrage bot might identify that BTC is trading for $200 more per token on Kraken than it is on bitFlyer, leading the bot to buy BTC on bitFlyer and quickly sell it on Kraken in order to make a small profit.
One advantage of this type of bot is that you aren’t selling tokens you own; rather, you’re taking advantage of gaps in the market.
Because Blackbird isn’t affected by market volatility, it is an effective tool in all market conditions. Even if bitcoin loses half of its value overnight, the bot’s trading strategy will be unaffected. Additionally, arbitrage strategy works in parallel on different exchanges, so there are no latency issues and bots can make profitable trades whenever an opportunity is detected. Blackbird is exclusively a bitcoin automated trading bot at this time.
Best free trading bot for non-technical users: Superalgos
While most free bots are designed for those with coding skills, Superalgos offers a visual interface akin to those more frequently found in paid offers. This opens up crypto bot trading to a new audience of non-technical users. Its capabilities are surprisingly robust and include automated trading, visual strategy design, and back and forward testing. What’s more, the initiative is committed to remaining free, open source, and zero trust.
Best free trading bot for advanced traders: Catalyst Enigma
Catalyst is a highly customizable free bot built using the Python programming language. Developers can build and test complex custom strategies and analyze them on Enigma's dashboard, which provides a number of valuable metrics about each strategy. Users can then share this data with other users and compare notes on which strategies are the most effective.
Best free trading tool for aggressive traders: Ichibot
Ichibot ismore of a tool than a bot, as it is run completely through the command line interface and won’t make any trading decisions on its own. It’s a trade strategy design platform for those who prefer code over clicks. Users can design complicated trade strategies for Binance and FTX and execute them in real-time to take advantage of market fluctuations.
Best free (for now) DeFi bots: TokenSets
TokenSets is a powerful DeFi portfolio management infrastructure that has not (yet) instituted trading fees. DeFi “sets” are collateralized portfolios that rebalance according to each investor’s strategies. While some sets are managed by individual or institutional creators, others are “robo sets,” pegged to rebalance automatically based on certain technical indicators. TokenSets is a great option for investors interested in getting started with DeFi — particularly now, before its trading fees kick in.
What are the best paid crypto trading bots?
Best all-around paid trading bot: Trality
What sets Trality apart is its powerful Python API, which means that Python-savvy traders can use the familiar language and libraries to develop bots. Its in-browser coding features include intelligent autocomplete and backtesting, with in-browser debugging and rebalancing coming soon. Although this newer platform is still adding capabilities, its easy-to-use Python integration and detailed documentation make complex bot building more transparent.
Also great all-around: Cryptohopper
Cryptohopper has a lot of might: it works with 100+ tokens on 13 exchanges and has hundreds of thousands of users. As such, its packages—which range from $20–$100/mo— offer something for everyone. Beginners will find a wealth of educational resources, templates, and signals, while experts can design and backtest their own strategies. Hosted in the cloud for quick deployment, Cryptohopper’s deep toolbox and user-friendly interface make it a good all-around choice.
Best paid social trading bot: Shrimpy
Shrimpy is focused on long-term portfolio management. In addition to enabling automatic trading, portfolio rebalancing, and cross exchange performance monitoring, Shrimpy also connects users with a unique social feature. Traders can copy trade the strategies of top users. Or, if their own trades are highly successful, they may find themselves on top of Shrimpy’s “leaderboard,” giving them an opportunity to earn monthly income from posting. Shrimpy’s community, large number of supported exchanges, and easy-to-use interface have made it a premier automatic trading platform.
Best paid bot for advanced traders: Haasbot
Haasbot is highly advanced and has the price tags to match, starting at around 0.011BTC a year for its basic package. It allows users to deploy pre-built bots, customize existing bots, or develop new ones, all within a drag-and-drop user environment. Although Haasbot does offer backtesting and insurances to help minimize risk, its technology allows the deployment of highly sophisticated, multi-bot strategies, so is best used by experienced traders.
Also great for advanced traders: 3Commas
3Commas offers sophisticated trading options in a user-friendly, more affordable package, making it a good choice for independent traders looking to adopt more complicated strategies. For example, options trading is a tricky business, but 3Commas has a simple, highly-visual user interface that helps investors program automated options strategies. As an added bonus, 3Commas’ blog offers valuable insights, analytics, and guides for crypto traders.
Best paid fully-automated trading bot: Stacked
If developing your own strategies isn’t your thing, but high-yield investments are, Stacked might be the bot for you. This sleek app, which integrates with your Binance account, offers access to indices and pre-built, pre-tested bots. The confidence factor of these bots will cost you though, with monthly access ranging from $75–$1000+.
How do you file taxes for crypto bot trading?
You’ve selected your bot, programmed its strategies, and watched its results. Now, how do you file taxes on these transactions? Put simply, crypto bots trade on exchanges on your behalf. So, when it comes time to report cryptocurrency on your taxes, you just need to import your trades from these exchanges into cryptocurrency tax software. It’s the same process you’d use for trades you make yourself.
When choosing a bot strategy, it’s crucial to be aware of how many trades the bot will be making. High frequency trading bots making dozens or hundreds of trades a day can result in tens—or even hundreds—of thousands of transactions that must be reported. This increases the complexity of your tax calculations. However, if you determine high frequency passive crypto trading is the right strategy for you, TokenTax can handle such trading with the appropriate crypto tax plan.
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