3 Mistakes To Avoid When Using AI To Invest in Crypto

Yaël Bizouati-Kennedy

Fri, Apr 25, 2025, 12:02 PM 4 min read

Thanks to the quick evolution of artificial intelligence (AI), many aspects of life are being streamlined — including investing. However, you should always double-check the work of robots, and never lose sight of your own critical thinking skills.

While the technology can be extremely helpful when it comes to investing in crypto specifically, experts say there are some common pitfalls to avoid.

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“AI excels in a variety of areas when it comes to crypto investing. It can analyze market sentiment faster and with greater accuracy than a human investor,” said Brian Prince, co-founder and CMO of XCoins and founder and CEO of TopAITools.com.

He explained that AI can spot trends faster and apply them to real-time scenarios. For instance, it can be used in robo-advising, allowing you to take a hands-off approach to crypto investing. “But there are some pitfalls to watch out for,” he added.

Here are three mistakes to avoid when utilizing AI to invest in crypto.

According to Prince, crypto investing, like other forms of investing, should be approached with a long-term view. Yet, because AI investment platforms make it easy to perform high-frequency trades, it can be easy to try to “play the market,” he added.

“I prefer Warren Buffett’s philosophical approach to investing — whether it’s stocks or crypto. Never buy an investment for a minute that you wouldn’t want to hold for 10 years,” he said, noting that it’s important to keep an eye on long-term gains.

“Just because you can try and time the market and buy and sell frequently through AI, this may not be the best strategy, depending on your risk tolerance and financial situation,” Prince added.

Prince also noted that while some short-term, higher-risk investments can help you grow your money faster, crypto is highly speculative and volatile. As such, never invest more than you can afford to lose, especially if you are looking for short-term gains by timing the market with the help of AI.

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Vijay Marolia, founder and chief investment officer of Regal Point Capital Solutions, recommended not trusting AI for advice. Instead, he suggested using it for research, data entry and/or analysis.

“Don’t forget to double-check anything that sounds crazy or unreasonable,” said Marolia. “AI uses LLMs [large language models] that have the tendency to make up information — these are known as hallucinations within the world of AI.”