A lot of people believe that artificial intelligence (AI) will have a significant impact on practically every business, including cryptocurrency trading. Brett Harrison, the outgoing CEO of FTX.US who left his position just before the parent company’s demise, believes that AI could simplify the development of algorithmic trading techniques.
Harrison told CoinDesk in an interview that his new company, Architect, which received a $5 million seed round from investors including Anthony Scarmucci and Coinbase Ventures in January 2023, wants to provide investment tools to both small and large organisations. The beta version of Architect’s platform has been accessible to a small number of clients since May.
When interest in AI was at its peak, around February or May, Architect saw a chance to construct algorithmic trading algorithms for cryptocurrencies using generative AI tools like ChatGPT, the chatbot developed by Sam Altman’s OpenAI. According to him, starting from zero to one in such algorithms is frequently the most difficult portion because it calls for specialised knowledge and abilities that not all trading organisations have on staff.
In order to enable the use of natural language probes to generate trading strategy code, Harrison explained, “our idea was to leverage the OpenAI APIs [application programming interfaces] and combine them with our internal trading APIs that we’ve built on top of all these different protocols.” For instance, traders may create software utilising Architect’s platform that purchases bitcoin on Coinbase (COIN) when its price falls below those of other cryptocurrency exchanges.
However, Architect still considers AI tools to be in the “early exploration” stage and plans to include them in its platform’s feature set. According to user feedback, leveraging large language models (LLMs) for advanced market indications or actually integrating LLMs into the trading process are two more AI-powered tools that the company is taking into consideration.
LLMs, like OpenAI’s ChatGPT and Google’s Bard, are artificial neural networks trained on massive linguistic corpora in order to comprehend and produce texts that resemble those produced by humans. Due to their linguistic skills, LLMs are able to comprehend difficult ideas and communicate them to consumers in a clear and concise manner.
The key idea, according to Harrison, is to create high-quality software that enables institutions to be ready for a world where traditional and digital assets are combined smoothly. However, we believe that in the future, AI will be a vital part of most organisations, so we didn’t want to pass up the chance to apply AI technologies to our users.
The team behind the trading techniques ultimately determines their performance, not only the generative AI that was used to create them. Harrison pointed out that the quality of the output you’ll get from a tool like OpenAI’s Chat GPT will depend entirely on the suggestions you provide.
You must assess the plan, ensure that it is effective, make necessary adjustments, and test it, he said.
The FTX connection
Regardless of the new trading platform, Harrison and Architect have been shadowed by FTX, the organisation that had one of the crypto industry’s most well-publicised crashes.
Just months before the collapse of the exchange, in late September 2022, Harrison gave notice of his resignation as CEO of FTX.US. On its website, Architect lists eight workers, six of whom previously worked at FTX US.
When questioned about his involvement with FTX and fundraising, Harrison responded that while some investors were unable to do so, others were successful.
Sam would have to the business before it failed. After the crash, several of those same investors were also concerned about my connection to FTX. But there were only a few from everyone he spoke with, he said.
In what would have normally been some of the most challenging moments for the business, for raising money in general, not just in crypto but across the VC [venture capital] landscape, Harrison added, “We were able to raise, you know, very successfully.”