This study presents a comprehensive empirical comparison between quantum machine learning (QML) and classical machine learning (CML) approaches in Automated Market Makers (AMM) and Decentralized Finance (DeFi) trading strategies through extensive backtesting on 10 models across multiple cryptocurrency assets. Our analysis encompasses classical ML models (Random Forest, Gradient Boosting, Logistic Regression), pure quantum models (VQE Classifier, QNN, QSVM), hybrid quantum-classical models (QASA Hybrid, QASA Sequence, QuantumRWKV), and transformer models. The results demonstrate that hybrid quantum models achieve superior overall performance with 11.2\% average return and 1.42 average Sharpe ratio, while classical ML models show 9.8\% average return and 1.47 average Sharpe ratio. The QASA Sequence hybrid model achieves the highest individual return of 13.99\% with the best Sharpe ratio of 1.76, demonstrating the potential of quantum-classical hybrid approaches in AMM and DeFi trading strategies.
This study presents a comprehensive empirical comparison between quantum machine learning (QML) and classical machine learning (CML) approaches in Automated Market Makers (AMM) and Decentralized Finance (DeFi) trading strategies through extensive backtesting on 10 models across multiple cryptocurrency assets. Our analysis encompasses classical ML models (Random Forest, Gradient Boosting, Logistic Regression), pure quantum models (VQE Classifier, QNN, QSVM), hybrid quantum-classical models (QASA Hybrid, QASA Sequence, QuantumRWKV), and transformer models. The results demonstrate that hybrid quantum models achieve superior overall performance with 11.2% average return and 1.42 average Sharpe ratio, while classical ML models show 9.8% average return and 1.47 average Sharpe ratio. The QASA Sequence hybrid model achieves the highest individual return of 13.99% with the best Sharpe ratio of 1.76, demonstrating the potential of quantum-classical hybrid approaches in AMM and DeFi trading strategies.
We formulate automated market maker (AMM) rebalancing as a binary detection problem and study a hybrid quantum–classical self-attention block, Quantum Adaptive Self-Attention (QASA). QASA constructs quantum queries/keys/values via variational quantum circuits (VQCs) and applies standard softmax attention over Pauli-Z expectation vectors, yielding a drop-in attention module for financial time-series decision making. Using daily data for BTCUSDC over Jan-2024–Jan-2025 with a 70/15/15 time-series split, we compare QASA against classical ensembles, a transformer, and pure quantum baselines under Return, Sharpe, and Max Drawdown. The QASA-Sequence variant attains the best single-model risk-adjusted performance (13.99% return; Sharpe 1.76), while hybrid models average 11.2% return (vs. 9.8% classical; 4.4% pure quantum), indicating a favorable performance–stability–cost trade-off.
Quantum machine learning has emerged as a promising paradigm that leverages quantum computational principles to potentially outperform classical approaches on specific learning tasks. This paper presents a comprehensive empirical investigation comparing Quantum Machine Learning (QML), specifically Quantum Support Vector Machines (QSVM) against Classical Machine Learning (CML) baselines including Logistic Regression, K Nearest Neighbors and classical SVMs. We implement quantum kernel methods using variational quantum circuits with angle embedding, IQP and ZZ feature maps on datasets exhibiting varying structural complexity. Our experiments on synthetic quantum generated datasets (Quantum Parity, Quantum Entanglement, Quantum Interference) demonstrate that QSVM achieves superior classification accuracy with improvements ranging from 2.9 % to 60 % over the best classical baselines achieving a 55.6 % overall win rate. Notably, on the Quantum Parity dataset, QSVM consistently outperformed all classical models across multiple configurations. On real-world benchmark datasets (Breast Cancer, Iris, Wine), QSVM Angle achieved 88% accuracy on Breast Cancer compared to 76% for classical SVM Linear a 15.8 % relative improvement while matching the best classical performance on Iris(100%)and Wine(92%). All experiments were conducted using quantum circuit simulation on classical hardware. These results provide empirical evidence that quantum kernel methods offer meaningful advantages over classical approaches on datasets with complex feature interactions. We discuss the theoretical foundations of these improvements including quantum feature space expressivity and kernel alignment.
The growing complexity, interdependencies, and rapid fluctuations inherent in modern financial markets create substantial challenges for accurate forecasting, portfolio optimization, and risk management. Conventional machine learning techniques, while powerful, often face limitations in capturing nonlinear relationships and processing high-dimensional datasets efficiently. Quantum machine learning (QML) has emerged as a promising paradigm that leverages quantum computing principles to enhance predictive modeling in finance. This study presents a comprehensive investigation into the application of QML methods—including variational quantum circuits, quantum kernel estimation, and quantum-enhanced support vector machines—for financial time-series prediction and asset price classification. We propose a hybrid quantum-classical framework that integrates quantum feature mapping with classical optimizers to improve model expressiveness and convergence. Empirical experiments are conducted using historical stock market data and synthetic datasets to benchmark QML approaches against established classical models such as long short-term memory networks and gradient boosting machines. The results demonstrate that QML techniques can achieve superior prediction accuracy and lower computational latency under certain data regimes, particularly when dealing with small-to-medium-sized datasets and high feature correlations. Additionally, the study examines scalability considerations, hardware constraints of near-term quantum devices, and the interpretability of quantum model outputs in financial decision-making contexts. The findings underscore the transformative potential of quantum machine learning as an innovative tool for advancing predictive analytics in finance and provide practical insights into how financial institutions can begin integrating QML capabilities into their workflows.
In the financial sector, machine learning (ML) has emerged as a transformative technology that provides sophisticated solutions to critical challenges, such as in fraud detection, anti-money laundering, algorithmic trading, credit scoring, and financial forecasting. ML significantly improves the accuracy, speed, and efficacy of decision-making processes by using sophisticated algorithms and large datasets. Nevertheless, its integration into financial systems presents significant obstacles such as cybersecurity threats, regulatory compliance, and data quality concerns. Building on these developments, this review examines the emergence of quantum machine learning (QML), an approach that integrates quantum-computation principles with intelligent financial systems. QML exploits quantum phenomena, including superposition, entanglement, and parallelism, to overcome the computational constraints encountered in classical ML. Applications such as quantum support vector machines (QSVMs), quantum neural networks (QNNs), and quantum clustering are examined in the context of fraud detection, portfolio optimization, and market forecasting. In contrast to previous reviews, this study provides a comparative and integrative analysis of ML and QML in the financial domain. It highlights the current technical limitations and emergent hybrid quantum classical models, emphasizing strategic directions for future research. In addition, we suggest a new framework for assessing the suitability of QML in practical financial applications, thereby bridging the gap between theoretical potential and real-world deployment. This review not only consolidates recent advancements but also establishes the foundation for the next iteration of intelligent financial systems powered by quantum-enhanced technologies. • Quantum Machine Learning (QML) leverages unique quantum properties like superposition, entanglement, and parallelism to overcome the computational limitations of traditional ML approaches. • Techniques such as Quantum Support Vector Machines (QSVM), Quantum Neural Networks (QNN), and quantum clustering demonstrate significant advancements in efficiency and accuracy for financial applications. • QML showcases transformative potential in solving complex financial problems, including fraud detection, portfolio optimization, and market forecasting, with greater accuracy and computational efficiency. • The potential for hybrid quantum-classical models to stabilize hardware and advance quantum algorithms offers a pathway to overcome current limitations, paving the way for scalable and robust financial systems.
Quantum machine learning (QML) is a cross-disciplinary subject made up of two of the most exciting research areas: quantum computing and classical machine learning (ML), with ML and artificial intelligence (AI) being projected as the first fields that will be impacted by the rise of quantum machines. Quantum computers are being used today in drug discovery, material & molecular modelling and finance. In this work, we explore emerging research areas in the application of hybrid classical quantum machine learning (QML) in finance. We focus on hybrid classical-quantum models that have gained significant interest in the financial world for various applications. We utilise a real-world cryptocurrency dataset to train a quantum generative adversarial networks (qGAN), and implement the real-life NVIDIA stock price data on quantum LSTM (QLSTM), comparing its performance with classical Long Short Term Memory (LSTM) model. Additionally, we investigate the application of quantum circuit Born machine (QCBM) using a toy dataset for applications in finance. For the qGAN, we define quantum circuits for generators and showcase the potential for future quantum advantage in finance through QML, possibly in combination with QLSTM and QCBM. Our findings suggest that, while training classical data is more efficient on LSTM, the test predictions of QLSTM is slightly superior to its classical counterpart making it a promising candidate for financial forecasting and analysis for timeseries type data.
Stock market forecasting remains one of the most computationally demanding tasks in financial engineering, requiring sophisticated models capable of processing nonlinear patterns, high-frequency volatility, and large volumes of time-series data. Recent advancements in quantum computing offer the potential to surpass classical machine learning (ML) by leveraging principles such as superposition and entanglement to accelerate learning and optimization. This paper conducts a comprehensive comparison between quantum machine learning (QML) models and classical deep learning architectures for stock price prediction, emphasizing the technological improvements and optimization of computational methods. Our analysis integrates insights from prior studies, including the application of quantum-enhanced Gramian Angular Fields with CNNs [2], shallow parameterized quantum circuits for market indicators [4], and hybrid quantum-classical algorithms tailored to finance [1]. Experimental evaluation (using IBM Qiskit's quantum simulators and real hardware) demonstrates competitive performance of quantum neural networks (QNNs) against state-of-the-art recurrent neural networks (RNNs) and long short-term memory (LSTM) architectures [3]. Across AAPL/MSFT and short horizons, compact QNNs match strong LSTM baselines while using an order of magnitude fewer parameters, and—critically—transfer from calibrated simulators to IBM hardware with marginal degradation after mitigation. This device-aware training/evaluation loop exemplifies a deployable path for financial QML under realistic noise and resource constraints and motivates standardized, time-series-aware testing for the community. Results highlight the engineering value of quantum acceleration in feature encoding, the research novelty of hybrid ensemble strategies, and the future scope of benchmarking across leading quantum computing machines such as IBM, Google Sycamore, Rigetti, IonQ, and Xanadu.