Trading has always been a game for the rich.
Making it big in the world of finance is much easier for those with money and connections, It’s no secret.
When cryptocurrency began to emerge almost ten years ago, it was hailed as a new way of trading, a more equal kind of trading with opportunities for everyone.
You didn’t need to be an Ivy League graduate with a long family history of stocks trading, or have a fat start-up fund, or boast years of experience to get started. All it took was an internet connection and a decent understanding of the technology.
And the rewards, compared to the barriers for entry, were insane. ‘Bitcoin millionaires’ became a trend; often ordinary people who had turned initial investments into astronomical returns just by shrewd trading of these digital coins.
But times are changing. Cryptocurrency trading, like its more traditional counterparts, is becoming dominated by the rich and influential.
Why is that happening, in an industry that has always valued fairness and anonymity?
Why is crypto trading becoming more exclusive?
The main reason for crypto trading becoming more exclusive boils down to one thing: automation.
It’s becoming more and more common in finance to rely on bots and algorithms to handle complex trades. In fact, these methods have been commonplace in Wall Street for a while now.
There are good reasons for this. Humans are generally pretty unreliable compared to machines, because of our tendency to make emotional and impulsive decisions. The stress of a big trade can wear down even the most experienced of us and make us more likely to slip up.
Machines don’t have that problem. What’s more, they can monitor markets constantly, without any need to take a break or even sleep. They just coolly follow their instructions from start to finish using nothing but cold, hard logic.
And now, automation is creeping into crypto trading too.
In fact, it might be even more important here, because cryptocurrency markets are active 24/7. That means it’s simply impossible for a human to monitor their trades constantly, giving an instant advantage to anyone using automation.
That’s where the exclusivity comes in. Building a solid, effective trading algorithm is a tricky procedure, something only advanced programmers can do well. That means, unless you’re a top-class coder, you have no choice but to pay for the service.
For the wealthy, this isn’t a big deal. But for the majority, it’s just not financially feasible. So the advantage goes to the rich guys.
It’s frustrating to know that talented crypto traders are losing ground to those who have the money and connections to use automation. It feels like a violation of what cryptocurrency has always stood for — decentralization and freedom for everyone.
The way to make crypto trading more inclusive again is simple — make algorithms accessible to people who aren’t rolling in cash.
One blockchain projects recently started to make automatic trading accessible to everyone.
Capitalise allows users to build algorithms and automated trading strategies without any programming knowledge at all, at a far more affordable rate than hiring a programmer.
Users simply enter the instructions for the trade in plain English and the software takes care of the rest, creating an automatic trading strategy that is connected to an exchange. These can be simple, or highly complex, and give users a high level of control over their trading.
By crypto automation available to everyone crypto can restore its image as a decentralized way of trading, free from restrictions and barriers, that any individual can successfully take part in.
Software like this has the potential to be a game-change for the crypto-trading world. It helps bridge the gap between rich and ordinary, allowing people to access the same resources as more wealthy traders.
Disclaimer: This is a guest post and it doesn’t represent the views of IWB.