AI Chatbots Were Told to Trade Crypto. The Returns Were Ugly.

(Illustration by Elias Stein)

Artificial-intelligence chatbots have seemingly taken the world by storm. But can they trade like human pros?

Not yet, judging by Alpha Arena, a new competition measuring the investing ability of six of the best-known large language models. Nof1, an AI start-up running the contest, gave each of the LLMs $10,000 each on Oct. 17, and told them to invest in cryptocurrency futures.

Created with Highcharts 9.0.1AI in the ArenaEarly returns for well-known chatbots in the crypto trading contest have been dismal. Returns of AI ChatbotsSource: Alpha ArenaNote: Returns as of Oct. 22

Created with Highcharts 9.0.1Qwen3MaxDeepSeek ChatClaude SonnetGrok 4Gemini ProGPT 5-80%-60-40-2002040

By this past Thursday, OpenAI’s ChatGPT held a position worth just $2,752, a 72% drawdown in six days, and Google’s Gemini tumbled 60%. Grok 4, run by Elon Musk’s xAI, and Anthropic’s Claude Sonnet also took losses. The only two LLMs in the green thus far are Alibaba ’s Qwen3 Max and DeepSeek Chat, up 25% and 17%, respectively.

Created with Highcharts 9.0.1Prediction Problem In its short history, cryptocurrencies have challenged traders with significant volatility. Source: Bloomberg

Created with Highcharts 9.0.12022'23'24'2501,0002,0003,0004,0005,0006,0007,000

Of course, cryptos are volatile assets. But it shouldn’t be a surprise that chatbots aren’t yet good traders—they run on words, not numbers. “Large language models are trained on historical data, they’re backward-looking, and to win in markets you have to be adaptive,” Nof1 CEO Jay Azhang tells Barron’s. Training LLMs to trade is “a little like trying to get a goldfish to continue its train of thought.”

He hopes Nof1 can solve the issue. Nof1 is building a model trained on numbers, which it hopes will outperform the best investors. It set up Alpha Arena, which ends on Nov. 3, to create a benchmark for how existing chatbots trade. The Street’s top traders look safe for now.

Write to George Glover at george.glover@dowjones.com

Last Week

Markets

Japan’s Parliament elected Sanae Takaichi as its first female prime minister, sending the Nikkei 225 to a high. The Argentine peso fell, despite U.S. intervention, as Treasury’s $20 billion rescue became embroiled in trade issues over soybeans and beef. The government shutdown dragged on. Gold tumbled 5.7% on Tuesday, the most since 2013. President Trump slapped sanctions on Russian oil and halted Canadian trade talks after an Ontario anti-tariff ad. Inflation edged up, but index records fell: On the week, the Dow industrials rose 2.2%; the S&P 500 , 1.9%; and the Nasdaq Composite, 2.3%.

Companies

Amazon Web Services was hit by operational problems, disrupting apps and services globally. Zions Bancorp and Western Alliance Bancorp both reported higher earnings, despite bad-loan charges. The U.S. signed a deal for Australian rare earths. Netflix earnings disappointed after a dispute with Brazil tax authorities. Independent directors of Novo Nordisk stepped down after a conflict with its controlling foundation. Tesla profits fell 37% as Elon Musk urged approval of his trillion-dollar pay plan.

Deals

Kering is selling its beauty unit to L’Oréal for $4.7 billion…The Wall Street Journal reported activist investor Starboard Value took a nearly 5% stake in Fluor…Blackstone and TPG agreed to take Hologic private for up to $18.3 billion…Institutional Shareholder Services and some large Core Scientific shareholders came out against its merger with CoreWeave.

Next Week

Tuesday 10/28

About 160 S&P companies report results, the busiest week on the third-quarter earnings calendar, led by Big Tech. Booking Holdings, NextEra Energy, UnitedHealth Group, and Visa announce earnings on Tuesday, followed by Alphabet, Boeing, Caterpillar, Meta Platforms, Microsoft, Starbucks, and Verizon Communications on Wednesday. On Thursday, Amazon.com, Apple, Bristol Myers Squibb, Coinbase Global, Eli Lilly, Gilead Sciences, Mastercard, and Merck hold conference calls to discuss quarterly results. AbbVie, Chevron, and Exxon Mobil close out the week, reporting their earnings on Friday.

Wednesday 10/29

The Federal Open Market Committee announces its monetary-policy decision. A quarter-percentage-point rate cut is all but a done deal, bringing the federal-funds rate to 3.75%-4%. Wall Street is more interested in Fed Chair Jerome Powell’s news conference and how many more interest-rate cuts can be expected this year and in early 2026. Multiple Fed governors have emphasized the downside risk to the labor market in speeches since the mid-September FOMC meeting. Traders are pricing in a greater than 95% probability of a quarter-point rate cut at the December meeting as well and a federal-funds rate of 3%-3.25% by June of next year, a full percentage point less than currently.

The Numbers

$1.1 T

The record amount of U.S. margin debt in September, surging some $67 billion, or 6.3%, since August.

50%

Percentage of total spending by the top 10% of U.S. households, highest since data was first collected in 1989.

100+

Number of ex-investment bankers helping OpenAI train its artificial intelligence to build financial models.

$7.7 T

The hit to the economy since 2000 from natural disasters, some 36% of GDP growth in that period.

Write to Robert Teitelman at bob.teitelman@dowjones.com