AI can't save the plummeting market? Nickel Digital warns: Crypto trading still relies on human risk control

On February 10th, after a significant correction in the crypto market at the end of January, more and more investment institutions are turning their attention to artificial intelligence, hoping to reduce losses through algorithms or even find rebound opportunities. However, Anatoly Crachilov, CEO of asset management firm Nickel Digital, bluntly stated that AI is not a “savior during market downturns,” and that the true determinants of outcomes remain risk management and human judgment.

Nickel Digital’s latest survey shows that among the trading firms interviewed, approximately 96% of executives say that AI has become a core part of their investment process. These institutions collectively manage assets totaling about $14 trillion. But Crachilov emphasized that relying solely on models cannot replace human intervention. Machine learning and predictive systems excel at processing historical data but struggle to identify false information or abnormal fluctuations, which can lead to distorted automated decisions.

He pointed out that during recent market volatility, Nickel remains confident in its full-year performance, primarily due to strict risk control mechanisms. The company sets maximum drawdown limits for each fund manager. When volatility increases or thresholds are reached, strategies driven by AI must be forcibly paused to prevent the portfolio from suffering excessive losses.

Nickel employs a highly structured monitoring system, collecting over 100 million data points daily from underlying ledgers, yet still retains manual review processes. Crachilov mentioned that data sources can produce anomalies due to delays or errors—for example, showing a position as “zeroed out.” Relying entirely on automated systems in such cases could trigger unnecessary stop-losses, potentially amplifying losses.

Charles Adams, the company’s investor relations director, added that the core goal is to eliminate single points of failure. Nickel’s multi-layered structure, managed by over 80 fund managers overseeing hundreds or even thousands of sub-accounts, helps prevent any single system or agent failure from jeopardizing overall fund security.

This stance highlights a reality: as the integration of cryptocurrency trading and AI accelerates, technology can enhance efficiency and insight, but in highly volatile markets, discipline, caution, and human risk control remain crucial to preventing systemic errors.