TrustStrategy, a leading blockchain intelligence firm, has released a comprehensive report detailing how AI-driven high-frequency trading (HFT) firms controlled 63% of crypto liquidity during August’s market volatility. The findings highlight the growing dominance of AI-powered algorithmic trading in decentralized finance (DeFi), shaping market trends and liquidity flows.

AI Trading Firms Dominate Crypto Liquidity

According to the TrustStrategy AI Market Report, August saw significant volatility in major cryptocurrencies, leading institutional investors to rely on high-frequency AI trading strategies to maintain liquidity. Key findings include:

• AI-driven trading bots contributed 63% of total liquidity in leading crypto exchanges.

• Ethereum and Bitcoin saw record-high algorithmic trading volumes, surpassing traditional market-making methods.

• AI arbitrage mechanisms optimized pricing models, reducing spreads and improving capital efficiency in DeFi markets.

How AI Enhances Market Stability

AI-driven high-frequency trading firms play a crucial role in balancing liquidity and mitigating risks during volatile market periods. TrustStrategy’s report underscores the following major AI benefits:

• Real-Time Arbitrage Optimization: AI models execute thousands of trades per second, capitalizing on price inefficiencies across exchanges.

• Automated Risk Management: AI adjusts trading strategies in real time to respond to market shifts.

• Liquidity Scaling Mechanisms: AI firms dynamically redistribute liquidity, ensuring continuous capital flow.