Are crypto bots profitable and how much can they make?

Crypto bots let you automatically trade the market 24/7. Not all bots are the same and in this guide we explain if crypto bots are profitable and how much you can make using one.
By:  &  James Knight
Updated: Jul 27, 2022

A cryptocurrency robot is a piece of automated software that helps you to buy and sell coins at the right time. With so many available it can be difficult to know if they make money. Read on to learn more about crypto bots, if they are profitable, and how much money they can make.

What is a crypto bot?

It’s automated trading software that buys and sells cryptocurrency. Robots work by executing trades using either algorithms or AI. Algorithmic based robots make trades based on pre set rules. For example, a crypto robot may buy a coin based on certain patterns in price, indicators, market news, and so on.  

Crypto robots can also work using artificial intelligence. Bots of this nature use AI technology to react to and predict what price will do next. Robots analyse the market for you and make trades within seconds, while running automatically. 

Trading robots have been used in other financial markets for a very long time, but have recently gained popularity in the crypto space. There are lots of different types of crypto bots and you can even program your own one using platforms like MetaTrader 4. Most focus on the biggest coins like Bitcoin, but there are many that cover other smaller coins too. 

Are crypto bots profitable?

They can be, but not all bots are built the same and there is a wide disparity between what’s profitable and what isn’t. Some bots, like those used by developers and well funded investors can make substantial amounts of money. A report published by Bloomberg in 2022 suggests that some crypto robots have made hundreds of millions of dollars recently. 

However, the crypto market is largely unregulated and there are lots of bots out there that are either scams or clever marketing ploys to draw in beginners who are looking to make a quick buck. These types are almost always unprofitable and it’s best to stay away from them.

How much can a crypto bot make?

It is possible to make money using a crypto bot, but exactly how much you can make depends on lots of factors. If you start out with a large sum an are prepared to take a lot of risks, you could make lots of money. That strategy makes it more likely that you’ll lose money as well, though.

For most people, a 10-20% overall profit represents a successful strategy. Even an automated strategy is going to lose sometimes and you should use risk management features, like stop-loss limits, to minimise your potential losses.

How to tell if a crypto bot is profitable?

The easiest way to find out is to use one yourself. Not many crypto exchanges have demo accounts so to test a bot you will need to use real money, although some brokerage platforms do offer simulation mode where you could test your software. Below are five ways you can tell if a bot is profitable. 

  1. Backtesting. If you’re using a bot to trade your own strategy then you can use the software to go back in time and sell how well it would have performed. Backtesting can be completed very quickly so it’s an easy way to check if a bot would have made money in the past. However, historical performance is no guarantee of future profits. 
  2. Forward testing. You can use a crypto bot in live market conditions as a way to test its profitability. It’s important to note that using forward testing you’ll have to use live funds so it’s best to make sure you commit only a small amount of money in case it doesn’t perform well. If it does generate profits, you can start using more money. 
  3. Demo mode. Some crypto trading platforms let you get a feel for the markets using a demo account. A demo account replicates live market conditions with simulation money. This is a good way to use forward testing without risking any of your money. Not all platforms offer demo accounts so you’ll need to find one that does. 
  4. Reviews. Before you start using a cryptocurrency trading robot you can check online reviews to find out how well it performs according to other users. There are lots of forums and review sites where you can find information on a wide range of bots. Reviews can not only tell you  if a bot is profitable, but if it’s a scam or not. 
  5. Inspect its code. If you’re able to read computer code then you could check out the code for any bot before using it. While this method may not entirely let you know if it’s profitable, you will gain a good understanding of how it may perform in the future by inspecting its code and security. 

Should I use a crypto bot?

If you have a trading strategy that you want to automate, or want to earn passive income from the crypto market then you should consider using a bot. It is possible to create your own trading robot although you may require some technical knowledge to do so. There are lots of other bots available for free or to buy and many of them are profitable. 

Before you use a robot you need to make sure that using one is legal in your jurisdiction and you can follow the steps in the section above to quickly check if it’s profitable. Bots are suitable for all types of investor or trader. Experienced day traders can use one in addition to their manual strategies. Beginners can use one to earn money while they learn. 

It is important to remember that there are lots of scams around, so make sure that you do your due diligence before you start using a cryptocurrency trading robot. Here on Invezz we have lots of independent in-depth reviews on a wide range of crypto bots which you can use to find one that works for you.

Our editors fact-check all content to ensure compliance with our strict editorial policy. The information in this article is supported by the following reliable sources.

Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

Prash Raval
Financial Writer
When not researching stocks or trading, Prash can be found either on the golf course, walking his dog or teaching his son how to kick a… read more.
James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.