Crypto Trader Turns $2 Million Into $21 Million from AI Token
Crypto traders are profiting from the surge in Artificial Intelligence (AI) related tokens, but this rapid rise has faced criticism from some community members who view these tokens as less favorable than memecoins.
Crypto Traders Profit from AI-Related Tokens
On January 6, Lookonchain reported that a Solana trader turned $2 million into $21 million in under two months by investing in the AI agent and memecoin ai16z (AI16Z). The AI-managed crypto fund operates on the Solana blockchain and is governed by the ai16zDAO, named after the venture capital firm Andreessen Horowitz.
The investor acquired 10.6 million ai16z tokens for $2.27 million between November 15 and November 22, 2024, averaging $0.214 per token. The cryptocurrency subsequently surged 965%, trading around $2.28 at the time of the report. The investor's holdings were valued at approximately $21 million, yielding $19 million in unrealized profits. Recently, they sent 5.3 million ai16z worth $10.68 million to Jupiter for sale.
Another trader transformed $123,000 into $4.5 million by investing in ai16z when its market capitalization was $22 million. They purchased 6.17 million ai16z and sold 4.67 million for about $1.78 million last month, currently holding 2.65 million ai16z valued at $2.9 million, totaling over $4.5 million in profits. This trader also gained an additional $13.4 million from other AI tokens like GOAT, FARTCOIN, and ARC.
Community Criticism of AI Agent Tokens
In late 2024, AI Agent tokens gained significant popularity, with predictions that they would be a leading narrative alongside memecoins. Several tokens reached top ranks among memecoins by late December.
Ai16z, the largest AI memecoin by market capitalization, saw a 251% increase recently, reaching an all-time high (ATH) of $2.47 on January 2. It is currently the third-largest AI agent crypto and trades between $2.25 and $2.28.
Despite their success, AI tokens face heavy scrutiny. On-chain analyst ZachXBT labeled them as scams, stating that "99% of it is a scam" and suggesting that AI-wrapped tokens may be more misleading than previous trends. He argued that unlike memecoins, which made no promises, AI coins attempt to present themselves as legitimate to unsuspecting buyers. Additionally, an anonymous poll among Solana founders indicated that many considered AI Agents to be overrated.
Regardless of the criticism, the sector experienced a 5% increase in the last 24 hours, with a daily trading volume of $2.28 billion and a market capitalization of $17.5 billion, according to CoinGecko data.
