In the end, $1,946 profit was made after following ChatGPT’s advice for a month, with crypto investments making 130% more than stocks and Rivian and Solana having the highest return on investment (ROI). Crypto investments earned $1,359 and stocks returned $587, according to the experiment.
NewsBTC said that after a little bit of training, ChatGPT suggested exactly how much of the budget to invest in each stock and coin.
Jonathan Millet, business consultant at NewsBTC, said that while he was fully aware of Solana’s strong community backing and the widespread trust in its stability, he didn’t anticipate that its increased profits would be more than double the ROI of Bitcoin.
In terms of stocks, he said it was interesting that Rivian saw the greatest ROI overall — despite ChatGPT recommending investing the least in this stock.
What he was surprised most by, though, was a particular stock missing from ChatGPT’s investment suggestions: Meta, which recently released Twitter’s competitor, Threads.
“It was released at the perfect time, after news that Twitter was limiting the number of Tweets its users could see. This isn’t one of the stocks ChatGPT suggested investing in, despite Threads’ rapid user growth and positive impact on Meta’s stock price. Had ChatGPT recommended investing $1,000 in Meta, this value would have risen to $1,100 by the study’s close — a greater ROI than Apple or Amazon,” Millet said.
Another “hiccup” was one of the stocks ChatGPT suggested — Waymo. Waymo is not publicly traded, something some experts think proves ChatGPT is still in its infancy… and not entirely trustworthy when it comes to investing advice.
“ChatGPT isn’t going to make you rich by picking stocks. ChatGPT might be useful for summarizing evergreen investing techniques or the different styles of investments,” said Todd Stearn, founder and CEO of The Money Manual. “Let’s use common sense. Do you really think a free tool, or even the $20 a month version, is going to do all the work for you to make you wealthy? ChatGPT is a tool. Get skilled using it. But it’s still up to you to make the right financial decisions.”
Other stocks suggested by ChatGPT were rather expected: Apple, Amazon, Alphabet, Microsoft, Nvidia and Tesla. The worst-performing suggested stock was Pfizer, which fell upon news of a cancelled obesity and type 2 diabetes drug.
As for cryptocurrency, NewsBTC said ChatGPT offered an initial list of coins, and when asked how much to invest in each it gave a general strategy for investing in cryptocurrency. According to ChatGPT, 40%-50% should be invested in Bitcoin and Ethereum combined, and 10%-20% invested in other prominent coins.
In the end, NewsBTC decided to put 20% into Bitcoin, 20% into Ethereum and 10% for the remaining coins (including Ripple, Cardano and others).
Bob Baxley, a core contributor to Maverick Protocol, said while it’s unsurprising that people are utilizing ChatGPT for designing and implementing investing and trading strategies for both equities and crypto, we’re still in the early stages.
“So of course it will take time and development for these emerging technologies to reach a level in which implementing such strategies can be considered reliable and safe,” said Baxley. “But there are certainly signs that AI can be compatible with crypto, in particular, in a potentially large number of ways.”
For instance, Baxley said, in the coming years we will see a number of crypto-specific platforms that increasingly utilize algorithms — and machine learning in general — for tailoring trading and investing strategies.
While it will take time for these technologies to become sophisticated enough to accurately reflect the associated risk appetite for any given trader and investor, automating such strategies will likely make investing much more efficient — and easier — for people and organizations, he added.
“Again, while the fusion of these technologies in the investing space offers a lot of great potential, people should be cautious,” Baxley said.
Overall, NewsBTC concluded that, “Alongside providing often unreliable advice, a lack of real-time data visibility is one of the biggest flaws in relying on AI models like ChatGPT for investment guidance.”
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
