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As the world of cryptocurrency trading evolves, so does the technology that supports it. In recent years, we have seen an increase in AI tools such as ChatGPT embedded in various facets of the crypto landscape. This development, although exciting, is not without drawbacks.
A recent survey by my own Bitget exchange found that 80% of crypto traders admitted to having negative experiences with ChatGPT. Specific examples included false investment advice, misinformation and falsification of facts.
Misleading investment recommendations
Artificial intelligence is not an omnipotent entity but rather a man-made tool. The AI and, more specifically, ChatGPT, operate within the parameters set by human developers, and while its capabilities are impressive, they are not without limits. Our society’s understanding of these tools is still maturing, and it is essential to recognize their potential risks, especially when it comes to financial decisions.
Related: Who Was Binance’s First User?
In the pursuit of better customer experience and innovation, many fintech companies are exploring the potential benefits of integrating AI into their operations. Experiences of using AI for client requests, design, writing, and coding, however, have shown that human talent still outperforms AI most of the time.
Bitget tried to use ChatGPT to handle routine customer requests. At first, we were impressed with his ability to analyze and compile information. However, as we got deeper into more complex queries, the cracks started to appear. Although trained on a lot of data, ChatGPT sometimes offers misleading, biased or incomplete information, as a recent internal test reminded us.
When our staff inquired about the market sentiment regarding a lesser-known altcoin, ChatGPT mistakenly associated the name of the coin with a popular internet meme. The resulting response, while amusing, may have been taken seriously by newcomers to the market who rely heavily on third-party programs.
Another request 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 top 30 cryptocurrencies 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.
ChatGPT wants you to invest in LUNA. Source: Screenshot
The fact is that language models like GPT-4 and GPT-3, which are used in ChatGPT, have access to an outdated information base, which is unacceptable in the trading market, where speed and relevance are important. For example, FTX, the crypto exchange that went bankrupt in November 2022, is still safe and sound if ChatGPT is to be believed.
ChatGPT still wants you to use FTX. Source: Screenshot
Although the exchange collapsed nearly a year ago, ChatGPT’s knowledge only lasts until September 2021, which means it assumes FTX is still going strong.
The importance of human expertise in crypto trading
The crypto landscape is complex and constantly changing. It requires acute human insight and intuition to navigate its many twists. 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, businesses and individuals should not overlook the importance of human intuition and expertise.
As a result, we have chosen to limit our use of AI tools like ChatGPT. Instead, we put more emphasis on a blend of human expertise and technological innovation to better serve our customers.
This is not to say that AI tools have no place in the crypto sphere. Indeed, for basic queries or to simplify complex topics, they can be invaluable. However, they should not be considered a substitute for professional financial advice or independent research. It is essential to remember that these tools, although powerful, are not infallible.
In the world of cryptography, every piece of information carries 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 is crucial to verify this information from other reliable sources.
Additionally, data privacy is another critical aspect to consider. While AI tools such as ChatGPT pose no inherent privacy risk, they can be misused in the wrong hands. It’s crucial to ensure that the data you provide is secure and that the AI tools you use adhere to strict privacy guidelines.
Ethical considerations and data security
Still, AI tools like ChatGPT are not the enemy. These are powerful tools that, when used responsibly and in conjunction with human expertise, can dramatically improve the crypto 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.
During our journey with ChatGPT, we have learned that AI tools are only effective by their latest update, training and the data they have received. They may not always be aware of the latest developments or understand the intricacies of a dynamic and often volatile crypto market. Additionally, they cannot provide empathy, a quality often needed in the tense world of crypto trading.
Related: Brian Armstrong Promised Me $100 in Bitcoin, So Where Is It?
The integration of AI in crypto trading also raises ethical questions, especially when it comes to decision-making. If a user makes a financial decision based on misleading information provided by an AI tool, who bears the responsibility? This is a question the industry is still grappling with.
Then there is the issue of data security. In an age of data breaches and cyber threats, any technology that collects, stores, and processes user data needs to be scrutinized. While AI tools such as ChatGPT are not inherently a privacy risk, they are not immune to misuse or hacking. It is paramount to ensure that these tools have robust security measures in place to protect user data.
It should also be noted that while AI tools can process numbers and provide insights based on data, they cannot replicate the instinct that experienced traders often rely on. The kind of instinct that is honed over years of trading, observing market trends, and understanding the psychology of other traders. This is something the AI, for all its sophistication, cannot learn or imitate.
Although AI tools like ChatGPT offer exciting possibilities for the crypto industry, they should not be viewed as a silver bullet. They are tools to support, not replace, people, intuition and financial expertise. As we continue to explore the potential of AI in the crypto world, we should be aware of these limitations and potential risks.
Gracy Chen is the Managing Director of crypto derivatives exchange Bitget, where she oversees market expansion, business strategy and corporate development. Prior to joining Bitget, she held leadership roles at Fortune 500 unicorn company Accumulus and venture capital-backed VR startups XRSPACE and ReigVR. She was also an early investor in BitKeep, Asia’s first decentralized wallet. She was honored in 2015 as a Global Shaper by the World Economic Forum. She graduated from the National University of Singapore and is currently pursuing an MBA at the Massachusetts Institute of Technology.
This article is for general informational purposes and is not intended to be and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are the sole authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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