The trading bots market size is estimated to reach $52 billion in 2024, with steady dynamic growth. According to Verified Market Report (VMR) forecasts, the $93.55 billion mark may be reached by 2031 due to increased consumer demand, making the automated trading niche particularly attractive to investors. However, before launching your own bot, you should analyze your competitors, assess the needs of your target audience and decide on its functionality. Popular options: Arbitrage, GRID and DCA bots. Our company Merehead offers a wide variety of software development to simplify trading - let's look at the main available options below and point out what to pay attention to while launching such a project.
Bots by Merehead
Those traders who prefer automated trading can either
buy/rent a ready-made cryptocurrency bot or
create one from scratch according to the required settings. We offer both options.
As a
Merehead company, we have been specializing in blockchain software development for 9 years. Our team will help you to define your project goals and functional requirements for a crypto-bot, prescribe algorithms and create unique UI/UX for your needs. A full development cycle of your project: from goal setting to final release.
You can apply and calculate the cost through a special form on our official website.
What is a crypto-bot?
Cryptocurrency bot is a software that makes trading coins and
meme coins easier by automating the transaction process. Algorithms analyze the crypto-market independently in real time by connecting to the API of exchanges and trade based on a given strategy (arbitrage, scalping and others). Programmers prescribe the criteria in the algorithms that must be met to conclude a deal to buy/sell assets, and the trader can choose the basic parameters.
Option risk management allows traders to set allowable trading limits: maximum/minimum transaction amounts, allowable transaction costs, profit margin, etc. The main advantages of crypto-bots are:
- Real-time analysis of a large data volume, which is impossible when trading manually;
- Instantly finding spreads and placing buy/sell orders;
- Backtesting strategies without risking trader's assets. Bots test various tactics based on historical data. Modern bots are also capable of learning, which increases the efficiency of their work;
- Eliminating the human factor. When trading manually, traders often make losing trades due to emotions, while software works according to clearly defined parameters taking into account the maximum allowable risk;
- Additional protection from legal conflicts. Many bots have an option to monitor current laws and regulations related to cryptocurrencies, which helps traders avoid legal consequences.
Crypto-bots types
Software for automated trading is classified according to the inherent strategy for trading.
Arbitrage bots and margin bots are the most common. However, based on VMR statistics, their main target audience is beginners, not professional traders.
Verified Market Report: Analytics on types of bots in 2024
The most popular types of crypto bots are reviewed in the chart below.
Bot type |
Description |
Arbitral |
Bot buys coins at a low price on one stock exchange and resells them on another at a higher price. It makes a profit due to the price difference. Popular strategies: triangular, time, inter-exchange and fund arbitrage. |
Medium Reversion Bot |
Bot is actual in highly volatile markets: it automatically buys coins when the price deviates downward and sells them on the rebound. This tactic is effective, as the value of coins tends to return to average values. |
Bots with a machine learning option |
Software analyzes the crypto market more efficiently than traders and identifies patterns to improve trading strategies. Different crypto trading methods are applied to capitalize on financial gains. |
Trending bots |
Software tracks the trends in the crypto market: buying coins is done when the price rises, and when the trend changes and the value starts to decline, the bot automatically places a sell order. Important indicators that are taken into account: trend lines and moving averages. |
News analysis bot |
Cryptocurrency market is highly volatile and price changes are strongly influenced by comments in social networks, statements of large investors, and published news. The software analyzes this data, makes forecasts based on it, and performs transactions to buy/sell coins. |
Market bot |
Software places orders to buy/sell koins at market value. Earnings are formed at the expense of the spread. Such bots give a stable, but often small profit. They are effective in periods of low volatility of the cryptocurrency market. |
Bot for rebalancing cryptoportfolio |
Software is aimed at balancing the portfolio in accordance with the trader's defined strategy. It automatically buys/sells assets in order to maintain a specific portfolio weight. |
Scalping bot |
Software applies tactical scalping: earning on insignificant fluctuations in the price of assets. The bot provides a high speed of concluding transactions, which is important in this type of trading. |
Example of cryptobot functioning
The algorithm of software actions will be different due to the type of bot and the set parameters. For an example, let's consider the strategy of cross-platform
arbitrage development:
- The software connects to the API of several crypto exchanges and monitors the current BTC quotes on several platforms.
- When a large difference in the value of a coin on Bybit and Binance is recorded, the bot purchases 1 BTC on Binance for 64,000 USDT.
- The bot transfers 1 BTC to Bybit.
- An order is created to sell 1 BTC for 64,100 USDT.
- The software automatically calculates and records the net profit including transaction costs.
Crypto-bots market analysis: 2024
The automated cryptocurrency trading industry has shown dynamic and steady growth since 2021. Verified Market Research analysts forecast an expected CAGR (compound annual growth rate) of 8.75% from 2024 to 2031, which is good for investment.
Verified Market Report: Forecasted Crypto-Bots Market Dynamics
The main reasons for such dynamics:
- Increased demand for trading bots. More and more traders, especially those aged between 25 and 35, are trying to automate their trades. According to surveys, the main reason is that software analyzes the market and concludes deals faster and more efficiently. In addition, the human factor is excluded - most mistakes in manual trading are made due to emotions;
- Market development through the development of new technologies. In 2024, the implementation of algorithms along with the development of AI and machine learning is actively practiced. Also, modern analytics tools allow for a better understanding of consumer needs;
- General favorable economic trends. PriceWaterhouseCoopers predicts that from 2024 to 2030, the average global economic growth will be ~3% per year.
Asia Pacific accounts for the largest percentage of the cryptocurrency bot market, with
North America and Europe sharing the second place in 2024. However, North America is projected to prevail over the European market in 2026-2031 due to the dynamic growth in demand among traders.
Verified Market Report: Crypto-bots market distribution by region
Therefore, developers of crypto-bot platforms should focus on these regions when approving marketing strategies. Moreover, as competitor analysis shows, companies that offer comprehensive automated trading solutions and maximize operational efficiency are the winners. Such platforms offer access to several types of bots and a set of analytical tools: Copy-bot, DCA, Social Trading, GRIFD, AI-bot, real-time crypto market analysis, Trailing orders and more. Usually payment is made on a monthly/annual subscription basis.
Competitor analysis
Platforms with trading bots are popular trend in 2024, so the competition in this field is high. The top ones include Cryptohopper, CoinRule, Pionex and 3Commas. Let's take a look at their main characteristics:
- A cloud-based platform that provides subscription-based access to trading bots. Total number of registered users: 840,000+. Traders can access Copy-bot, Automated trading, Marketmaking bot, Trailing stops, Demo trading, Algorithmic intelligence and other tools. Gives access to all top exchanges: Poloniex, Binance, KuCoin, BitFinex, HTX and others. Free test period (7 days) is available. The price for paid subscriptions starts from $24 per month;
- CoinRule. An automated trading platform that also works on a subscription basis. There is a free package, the price for paid services starts at $29.99 per month (Hobbyist package). Gives access to crypto exchanges Binance, Kraken, Coinbase and others. 150+ trading strategies are available (number varies by subscription level), Telegram notifications, a cryptoasset market scanner option, a tutorial section, and an active trading community;
- Pionex. Platform with 16 free trading bots: GRID, DCA, Rebalancing bot and others. 370+ tokens and coins available. The monthly trading volume through the platform is $50+ billion and every day transactions totaling $100+ million are made. Binance crypto exchange is one of the platform's partners. Mobile applications for iOS and Android are provided;
- 3Commas. A platform that cooperates with 16 top crypto exchanges. Subscription users have the access to a multifunctional trading terminal and dozens of trading bots, including GRID, DCA and Futures, as well as options to copy trades of successful traders. Access to market analytics - 24/7 in real time. There is a free 3-day trial and monthly subscriptions for $49 and $79.
Pionex crypto-bot platform example
Tips for launching a crypto-bot
Developing a
trading bot for Binance is a multi-step process that includes both goal setting and functionality definition, as well as purely technical aspects of software creation. Here's a brief walkthrough of the main steps.
Selecting crypto exchanges and registering a profile
Whatever type of bot is chosen, the software will in any case receive data through the API of crypto exchanges and place buy/sell orders on the platforms. Therefore, it is necessary to create accounts in advance on all exchanges that will be used and undergo identity verification to gain access to all types of trading and analytical tools. When choosing exchanges, it is worth considering:
- Availability of an open API. This is a prerequisite, but the option is not provided on not all crypto exchanges;
- List of available trading pairs;
- Liquidity;
- Commission fees;
- List of prohibited and allowed jurisdictions and established restrictions for residents of some countries.
Recommended options: Binance, Kraken, Bybit, Coinbase and MEXC.
Identifying the bot type and functionality
It is important to decide how exactly the crypto-bot will generate profits, what strategies to use at this stage (arbitrage, scalping, mean reversion or others), as well as its target market. It is also worth determining whether the software will draw information only from free sources, or whether it is acceptable to use paid sources as well. A further important point is whether there will be additional options: backtesting, stop-loss, risk management, analytical tools, and so on. If a crypto-bot is created not only for itself, but with the purpose of selling it as a service, the information is published in a structured form on the project's website ("White Paper").
Choosing a programming language
Different languages can be used to create crypto-bots, the most popular options are:
- С++;
- Python;
- Perl;
- JavaScript;
The speed of crypto-bot response to asset price fluctuations in the market and the ability to place buy/sell orders instantly is crucial, so fast programming languages are more suitable. Recommended options are Python or C++. It is important to select a team of qualified developers who know how to work with the chosen language and can provide the required functionality.
Crypto-bot architecture
During this phase, an algorithmic model is developed, based on which the software will make decisions. Moreover, the choice is made as to whether cloud services (AWS, Azure, Digital Ocean, etc.) or a dedicated server will be used to deploy the bot. The main criteria to base your decisions on are security and reliability. Hence, choosing cloud storage with a free subscription is a budget-friendly solution, but not the best one.
UI/UX development
The user interface should provide maximum convenience of trader's interaction with the software. Special attention should be paid to synchronization of actions. The best solution is to develop a control panel from scratch, but there is also a more budget-friendly option - using ready-made templates. Popular tools for prototyping in 2024: Adobe XD, Origami Studio, Sketch.
Backtesting
Having the
crypto trading bot ready, it is necessary to make sure that it works correctly and efficiently. Testing is carried out in several stages:
- Evaluation of correct operation: whether the trading bot makes decisions based on the specified parameters, whether there are bugs, etc;
- Security assessment: vulnerabilities are identified and it is determined how resistant the software is to hacker attacks;
- Evaluating efficiency and profitability: this can be done either by using a simulator or by connecting to a live cryptocurrency exchange. The trading bot will demonstrate what trades it would have made in the past based on obtaining historical data.