Several cryptocurrency traders have amassed significant wealth by investing in the latest trend of AI-related tokens. However, this surge in popularity has faced criticism from various members of the community and industry experts who deem these tokens as inferior to the memecoin craze.
AI-Related Tokens Yield Massive Profits for Traders
A recent report by on-chain data analysis firm Lookonchain revealed that a savvy Solana trader reaped substantial gains from AI agent and memecoin ai16z. Within a span of less than two months, this investor turned $2 million into a staggering $21 million during the rally of AI-related tokens.
The AI-managed crypto fund operates on the Solana blockchain under the governance of ai16zDAO. The name is a clever nod to the venture capital firm Andreessen Horowitz, also known as a16z, presumably created to attract interest to the project.
The whale behind this success story acquired 10.6 million ai16z tokens valued at $2.27 million from November 15 to November 22, 2024, with an average cost of $0.214. Since then, the cryptocurrency has surged by 965%, now trading at around $2.28.
At the time of the report, the investor’s holdings were worth approximately $21 million, with unrealized profits of $19 million. Recently, the whale sold 5.3 million ai16z tokens, totaling $10.68 million, through a limit order on Jupiter.
In a similar success story, another trader turned $123,000 into $4.5 million by investing in ai16z when the token’s market capitalization was $22 million. This trader bought 6.17 million ai16z tokens and sold 4.67 million for about $1.78 million the previous month.
With holdings of 2.65 million ai16z tokens valued at $2.9 million, the total profits for this investor exceeded $4.5 million within two months. Additionally, this trader accrued $13.4 million from other AI crypto tokens like GOAT, FARTCOIN, and ARC.
Community Deems AI Agent Tokens ‘Overrated’
In late 2024, AI Agent tokens gained significant traction among cryptocurrency investors, with many experts predicting that AI-related tokens, alongside memecoins, would dominate the narrative for the year. However, AI memecoins took center stage as the year drew to a close, propelling some tokens in this sector to the top 10 memecoins in late December.
Ai16z, the leading AI memecoin by market capitalization, saw a 251% surge in the past month, reaching an all-time high of $2.47 on January 2. Currently, the token holds the third spot among AI agent cryptocurrencies and has experienced a 25% increase in the last 24 hours, trading between $2.25 and $2.28 on Monday.
Despite its success, the AI token sector has faced backlash from the crypto community. On-chain investigator ZachXBT recently labeled AI agent tokens as fraudulent. Responding to industry member Justin Taylor, ZachXBT stated that “99% of it is a scam” and suggested that “the AI agent wrapper grifts are probably worse than other past trends.”
ZachXBT argued that memecoins “at least” made no promises, while “AI coins try to larp as much as possible to appear legit to unsuspecting buyers.” Similarly, Solana founders have expressed skepticism about AI agent tokens being overhyped. A poll of 42 Solana founders revealed that many consider AI Agents, along with Blinks, to be the “most overrated Solana sector.”
Despite the criticisms, the sector has witnessed a 5% increase in the last 24 hours, boasting a daily trading volume of $2.28 billion and a market capitalization of $17.5 billion, as per data from CoinGecko.
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