The Dangers of Algorithmic TradingIt’s completely normal, for various reasons, to be worried about leaving investing decisions to software and bots and trusting them to make the right choices with your money. First of all, an algorithm is only as good as the programmer. Human errors in programming can lead to wrong decisions and bad trades. Secondly, crypto trading algorithms are subject to news, social media posts, and other organic factors, which can be easily manipulated by unscrupulous elements. These fears are not completely unfounded. This is because there have been instances in the past where investors lost a lot of their funds due to trading algorithms making wrong buying and selling choices. OptiToken purports to have created a way around bogus signals, fake news, and dump-and-sell schemes by using different variables from those used in the usual cryptocurrency trading algorithms. Rather than using news items and social media items, OptiToken claims to use identifiable “hard” variables like transaction volumes, mining volumes, mempools, and hashing power movements, among others.
Price Deflation and Hyper-DeflationIt’s simple economics — as demand rises, price falls. These basic principles are contributing factors to the volatility in the price of cryptocurrencies. For OptiToken, a drop in the price and value of the tokens is intended to be prevented through a strategy known as constant upward price pressure. The strategy involves repurchasing some of the tokens. When profits are made from cryptocurrency trading, rather than adding to the available pool of optiTokens and causing a supply glut, the profits are used to buy off available tokens. If OptiTokens become more available than can be bought back, deflation occurs in the price, causing a drop in value. To counteract this possibility, extra OptiTokens are diverted to an address where they can’t be spent. This is a way to ensure a kind of artificial scarcity and keep the value of the cryptocurrency high. It is for this reason that OptiTokens are referred to as a hyper-deflationary currency.
Accountability and Potential DownsidesDespite all the possible advantages promised by OptiToken, investors still have the right to be worried about automated systems. No matter the variables being used in making predictions and determining buying or selling decisions, errors can still occur. When mistakes occur with large trade volumes of the magnitude being traded on a platform like OptiToken, the results can be catastrophic. Investors must therefore be cautious when trying to decide whether or not to purchase OptiTokens. Do you think there are healthy prospects for OptiToken going forward? Leave your comments in the section below.
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