Partnered With:

Do you think ChatGPT is a good bet?

Read this article in 17 Minutes

GPT-4 predicted the BTC fluctuation range of 2w5 ~ 3w2 in May based on the data

Article: czgsws, Logicrw, BlockBeats

The artificial intelligence ChatGPT developed by OpenAI has been able to tell whether the Federal Reserve is a dove or an eagle, Bloomberg reported, citing two related papers. And how sector headlines affect the stock prices of related companies with the accuracy of a professional analyst.

According to the report, this result indicates that ChatGPT has taken an important step forward in the AI strategy of transforming the speech of people and news of events into trading signals, and the first wave of related research on "the use of AI chatbots in the financial sector" is coming.

Could ChatGPT do the same for cryptocurrency investors? With ChatGPT's understanding, can you provide some useful analysis for crypto headlines, and more? BlockBeats will address these issues to see if ChatGPT's interpretation can also help crypto investments.

Analysis of Fed speech with ChatGPT

In the spirit of practice, we chose the Fed's most recent impact on currency volatilitydeclaration", in a series of question-and-answer sessions that followed the "25 basis point rate hike" decision in the early hours of March 23, allowing ChatGPT to parse the remarks as follows:

1. "Higher interest rates and slower growth are weighing on businesses, and virtually all members of the Committee see the risks to growth as tilted mainly to the downside. Inflation expectations appear well anchored for now."

ChatGPT analysis: Doves.The statement focused on risks to growth and inflation expectations, suggesting the Fed could be cautious on monetary policy.

2. "The Fed is continuing to reduce its balance sheet significantly, but we believe recent banking events will lead to tighter credit conditions that will impact the economy and the actions we need to take in response. Recent economic indicators have been stronger than expected, and we will use that as a basis for our decision making, meeting by meeting, with a close eye on incoming data and the actual and expected impact of tight credit conditions."

ChatGPT Analysis: Doves.The reference to tight credit conditions and emphasis on economic data suggested caution in future monetary policy decisions.

3. "A small number of banks have experienced significant difficulties, and the Federal Reserve, the Treasury, and the Federal Deposit Insurance Corp. have taken decisive action early on. Depositors' savings are safe, the Federal Reserve's lending programs are effective in meeting banks' needs, and ample liquidity is available. We will also learn from this episode, continue to monitor the situation closely, and are prepared to use all our tools to ensure the safety and soundness of the banking system."

ChatGPT Analysis: Doves.The statement focused on the Fed's actions to ensure financial stability, showing concern and willingness to intervene in financial markets.

4. "The Fed considered a pause, but there was strong consensus support for a hike. The need for further hikes would be based on the actual and expected impact of the credit crunch, with the banking crisis likely to have only a modest impact."

ChatGPT Analysis: Hawks.The reference to consensus support for a rate hike indicated the Fed's concern about inflation and its tightening stance on monetary policy.

5. "Participants did not see a rate cut this year, the SVB bankruptcy was an exception and there were no broad weaknesses in the banking system. A rate cut this year was not our base case.

ChatGPT Analysis: Neutral.While the statement said it would not cut rates this year, it also mentioned tighter credit conditions as an alternative to higher rates, signaling the Fed's flexibility on future monetary policy.

6. "If we need to raise rates even higher, we will do so. We are not considering insuring all unprotected bank deposits."

ChatGPT Analysis: Hawks.The statement underscored that the Fed would raise interest rates if necessary and ruled out insuring all unprotected bank deposits, signaling a determination to tighten monetary policy.

7. "The recent provision of liquidity has increased our balance sheet, but the intent and impact are different. The balance sheet expansion reflects short-term lending and the recent balance sheet expansion is not related to monetary policy."

ChatGPT Analysis: Neutral.The statement explained the reasons for the balance sheet expansion, emphasised that it was unrelated to monetary policy, and showed the Fed's attention to market interpretation, without explicitly sounding dovish or hawkish.

In response to the seven Powell statements we provided to it, ChatGPT-4 wrote,3 Doves 2 hawks 2 neutralWe can also see from the price trend of bitcoin at that time,After the day's plunge, the price of the currency again violently pulled back to the previous level, and even immediately hit a new high for the year, constantly developing to the level of $31,000 a few days ago.

One of the two hawkish comments is already on the ground, the other is still up in the air, and the three dovish comments all indicate that the Fed will be cautious about future decisions. In terms of the nature of the "speculation" in the market, perhaps it means that ChatGPT's answer does have a statistical correlation with Bitcoin's subsequent price movements. It is of referential value.

Analysis of SEC Chairman's speech by ChatGPT

Securities and Exchange Commission Chairman Gary Gensler defended the agency's aggressive regulatory practices at a hearing before the House Financial Services Committee on April 18, his first appearance before a panel since October 2021. It was his first appearance before the Republican-controlled House Financial Services Committee.

Let's put Gensler at the hearing with House Financial Services Committee Chairman Patrick McHenryStatement on whether ETH is a securityImport ChatGPT and ask it:

1. In Gensler's view, under what circumstances might cryptocurrencies be considered securities?

ChatGPT: Based on Gary Gensler's opinion and U.S. securities regulations, cryptocurrencies may be considered securities if:

Meet the definition of "investment contract" :According to the famous "Howey Test," a cryptocurrency may be considered an investment contract, and thus a security, if it meets the following criteria: (a) the investor puts money in, (b) the investor expects a return, (c) the return on the investment comes primarily from the efforts of others, and (d) the investment involves a common enterprise. This means that a cryptocurrency may be treated as a security if its value depends primarily on the efforts of other people or organizations, rather than market supply and demand.

A centralized organization or team:If cryptocurrencies rely on a centralized organization or team to operate, this could make them considered securities. For example, if the development, management, and promotion of a cryptocurrency is primarily the responsibility of a specific team, investors' gains may derive primarily from the efforts of that team, and thus the cryptocurrency may be considered a security.

Presale or crowdfunding:Cryptocurrencies are likely to be treated as securities during the pre-sale or crowdfunding phase, when investors buy tokens in the expectation that the project will succeed and yield a return. In this case, the value of the cryptocurrency is closely tied to the efforts of the issuing team and may therefore be considered a security.

Economic design of tokens:A token may be considered a security if its economic design creates the expected return for the investor. For example, a token may be considered a security if its design encourages investors to hold it for dividends or profits.

It is important to note that the classification of cryptocurrencies may change as they grow and evolve.For a platform like Ethereum, increased decentralization can lead to a shift from a security to a commodity.The specifics of each cryptocurrency depend on its characteristics and relevant facts.

2. Did Gensler make it clear in the dialogue whether ETH is a security or a commodity?

ChatGPT: In this conversation, Gary Gensler does not make it clear whether ETH is a security or a commodity. He did not give a direct answer to a question about whether ETH was a security or a commodity. Instead, he emphasized the need to judge based on specific facts and laws, while mentioning that the number of tokens and centralized teams or organizations may have an impact on whether cryptocurrencies are considered securities. In general, Gensler left unanswered the nature of ETH.

3. Is Gensler's comments positive or negative for Bitcoin?

ChatGPT: Judging from Gensler's remarks in the above discussion, he did not directly address the specific legal status of bitcoin. In the past, however, Gensler has said Bitcoin is more of a commodity than a security. That means Bitcoin could be regulated more like a commodity than a security in the United States.

That could be positive for Bitcoin, for the following reasons:

1. Treating Bitcoin as a commodity could exempt it from stricter securities regulations, reducing the potential compliance burden.

2. Treating Bitcoin as a commodity would help remove legal uncertainty from the market and provide a clearer regulatory environment for investors and market participants.

3. Commodity status could make Bitcoin more attractive to some traditional investors, who may already be familiar with how commodity markets work and are regulated.

Still, Gensler's view of bitcoin doesn't mean the cryptocurrency industry is exempt from regulation. Instead, Gensler has said the cryptocurrency market needs more regulation and investor protection. So while his comments could be positive for Bitcoin, the cryptocurrency industry could face more regulation.

Use ChatGPT to predict Bitcoin price action in May

Finally, we try to provide ChatGPT with recent bitcoin price data and ask GPT-4, as analyst DAN, to predict the price movement of bitcoin in May. Due to character length limitations, we only gave GPT-4 data since March 1.

"Please tell me what bitcoin's price action will be in May based on the price action data from March 1, 2023 to April 18, 2023. What are the high and low prices for the month?"

GPT-4, in DAN's voice, gives the following prediction based on the data:

Bitcoin prices will continue to fluctuate in May, with a high of $32,000 and a low of $25,000.