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Artificial intelligence has come a long way since its inception, and in today’s world, it has proven itself as a powerful tool in boosting human productivity in various contexts.
One of its modern-day use cases is assisting investors in managing their stock and crypto portfolios.
With AI, the job of an everyday investor and financial analyst becomes easier, as artificial intelligence tools can perform a wide variety of tasks that can help create favorable situations for the investor.
That said, just like any tool, there are limits to the impact of AI in influencing the success of an investor’s investment strategies.
While AI technology is getting better with each passing year, it lacks certain qualities that make it a superior option.
AI isn’t quite at the level of replacing financial analysts, but it’s getting scarily close to mirroring their abilities in various capacities.
If you want to see how AI is changing the investment scene in 2025, you’re in the right place.
Let’s take a look at how artificial intelligence is shaping the way we invest our crypto and stock holdings amidst the 2020s.
6 Ways How AI is Changing How We Invest
#1. Assists in Portfolio Management
One of the perks of AI tools in the modern era is their ability to create a portfolio that matches the investor’s goals and risk tolerance.
AI can analyze investor-defined criteria and select assets to invest in based on the pre-set data.
Moreover, AI has a massive database to draw from, making it a great tool to gather historical data and find potential trends.
Furthermore, AI can also monitor the real-time value of the portfolio and adjust investment allocations based on market shifts without heavy investor intervention.
These bots can easily be integrated into stock and crypto market exchanges like Bitcoin.com.au and other trading platforms through APIs.
On top of that, AI can also flag and isolate underperforming assets in the portfolio.
This allows investors to readjust their portfolio accordingly or reevaluate their investment strategy to best direct it towards profitability.
AI can perform these tasks effectively, provided the investor has clearly defined their parameters and configured it properly.
It should be stated that AI isn’t a fool-proof way to develop a purely profitable portfolio, but it can be a good tool in analyzing historical trends and patterns in conjunction with traditional strategies.
#2. Improved Data Collection and Processing
AI tools are trained with a gigantic dataset of information. These tools can also access this massive volume of data at blazingly fast speeds.
Given this, AI systems can filter and organize information like news articles, chart trends, and macroeconomic factors much more quickly than a human can.
It can even answer quantitative queries like financial ratios and moving averages of stocks and crypto, up to its last updated dataset.
This makes AI a great system to lean on when investors want to extract a volume of information rapidly without relying on unreliable sources.
That said, AI isn’t an error-free tool. AI tools are infamous for filling in the gaps with blatant misinformation and spreading it like it’s the truth.
This is especially true for queries that rely on a more present context, as the AI database is a few years behind.
So while the quick retrieval of information can be appealing for some investors looking to get a picture of the market or investment option, the drawn conclusion is not always guaranteed to be accurate.
#3. Utilization of AI Bots in Algorithmic Trading
One of the greatest faults of human-centred trading is the tendency to be emotional and irrational during high-stakes trading scenarios.
This isn’t the case when robots run the show and execute the trades themselves.
AI bots represent a new trading approach, leveraging Large Language Model (LLM) technology to analyze data and inform market decisions.
These bots execute trades instantaneously when certain pre-set conditions are met, basing their decision on learned strategies through a machine learning process.
AI bots allow users to have their finger on the pulse in the crypto market 24/7, allowing them to trade whenever the conditions are favorable.
These bots also execute trades faster than humans.
But what makes these bots great is that they also continuously refine their strategies and redefine their goals, learning from previous profits or losses.
There are many types of AI bots out there, each with its own level of customization.
Not all of them are guaranteed to reap success, but some of them can be effective tools to familiarize yourself with if you want to attempt to trade quickly with little emotional biases.
#4. Improved Sentiment Analysis
Another way AI is changing the game is its ability to process and analyze user sentiment within seconds.
User sentiment is an important consideration when analyzing a stock or crypto’s current and projected market position.
There are AI-specific tools like StockGeist that process textual information like news, user comments, social media posts, and financial reports about a specific company or stock listing.
The built-in AI then analyses the market’s overall mood and provides a report based on the public perception of the market.
This tool does what no human can do within a healthy time-span, and that’s to sit down and sift through hundreds, if not thousands, of constantly-updating textual information about a specific investment, industry, or crypto token.
The result of this extracted sentiment can give traders an upper hand on whether to invest or exit a particular position.
Investors no longer need to rely heavily on scrolling through social media or keeping up to date on relevant news bits to know how their investment is faring—they can just use AI tools to gather the information for them.
#5. Auto Triggers Execution Based on Real-Time Data
Another key function of AI bots in today’s investment space is their ability to execute trades as soon as market conditions are met.
Besides recognizing and notifying traders about shifts in macroeconomic signals or market sentiment, these bots can also be configured to execute trades when these triggers are hit.
The investor doesn’t have to provide manual input to facilitate the trade, meaning the trade can be done automatically at a level favorable to the investor.
The reverse is also true: when the market or a particular investment starts to downtrend, AI tools can notify investors of this downtrend and suggest rebalancing the portfolio to take on a more defensive stance.
This AI technology is especially useful in the crypto space, where tokens can shift in value dynamically by the day.
In any case, this auto-trigger executive ability allows traders to limit losses and score on gains automatically.
This not only helps them protect their assets, but it also removes any emotional biases that may arise from the sudden price surge or decline.
#6. Improved Visualization Tools
Another subtle but neat way artificial intelligence tools are starting to support modern traders is by helping investors recognize products, brands, and advertisements more easily than ever before.
Modern-day AI technology has robust image recognition systems that can instantly identify what’s in a photo.
Users simply have to upload an image to their system and let the AI work its magic.
Some tools do more than just identify the brand name of the company.
They can also provide a detailed visual overlay about the company’s performance, finances, chart patterns, and other fundamental information.
This feature is great for investors because it allows them to work more quickly to see company data points and key metrics.
This lets investors make decisions more quickly with a quick image scan, helping provide important information to support and validate investment decisions in real time.
Final Thoughts
We hope we’ve laid out the role of AI in the modern investing scene.
AI continues to evolve rapidly, and it may have a more impactful role in the not-so-distant future, so keep your eyes peeled for any breakthroughs to have an edge against other traders.
I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.
Visit my About Me page to learn more about me and why I am your trusted personal finance expert.
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