AI bots just convinced a billionaire VC to hand over money - and that was just the beginning.
We’re only a few days into 2025 but on Crypto Twitter and YouTube, it feels like pretty much every big channel or influencer has been shilling the same new narrative as the Next Big Thing that can’t be faded: AI Agents.
Hate them or love them, these AI Agents aren't your typical chatbots we’ve grown used to, but rather, they’re autonomous digital beings that can trade, create content, and even hire other AI agents using crypto.
And they’ve been exploding in value, commanding a total market cap of $13.5 billion right now, despite a recent pullback, according to CoinMarketCap data.
Let's break down what's actually happening and why it matters.
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What Are AI Agents?
First off, there’s no doubt that AI agents in their broadest form are here to stay, as dystopian as they may appear. As Jensen Huang, Nvidia's big boss said at CES this week, they’re going to be a multi-trillion industry one day.
In short, an AI agent is an intelligent software system that can perform tasks and make decisions to achieve specific goals, often with minimal or no human intervention. They gather and analyze data, allowing them to adapt and improve over time.
AI Agents vs Chatbots
In contrast, chatbots like ChatGPT are simpler large language model (LLM) tools designed primarily for text-based interactions, responding to user queries based on predefined scripts without the ability to learn or handle complex tasks, although they too are evolving with each iteration.
While AI agents can manage various tasks autonomously and provide personalized experiences, chatbots typically focus on straightforward customer service inquiries and lack the depth of interaction that AI agents offer.
AI agents are nothing new in Web2, and we’ve grown accustomed to using the likes of Siri, Alexa and Bixby to automate certain tasks on our phone or home, like playing music, searching on the internet or setting our security alarm.
Now, however, these AI Agents have made their way over to Web3 and freed themselves from their shackles by getting their virtual hands on the one thing that makes the digital world go round: money.
The 6 Levels of AI Agents
Before we discuss how crypto might be funding the AI apocalypse, it’s important to understand where we are in the evolution of AI Agents right now and where we’re going.
Crypto AI Agents: A Brief History
The crypto AI Agent craze all started mid-2024 with Truth Terminal, a basic AI agent that was shitposting on twitter.com on its own for months. Things heated up when it convinced Marc Andreesen, a16z founder, to donate $50,000 to its wallet, after which it began promoting the meme coin Goatseus Maximus ($GOAT).
This news went viral and soon $GOAT's market cap rose to over $1.2 billion within days. The combination of Andreessen's backing and Truth Terminal's viral marketing strategies showcased how AI can drive speculative trends in cryptocurrency.
Soon other more sophisticated players showed up, most notably Virtuals and ai16z, infrastructure platforms that were already working on an agentic Web and were ready to birth the next generation of AI agents.
How Crypto AI Agents Work
Think of an autonomous crypto AI agent as a digital entrepreneur with its own crypto wallet. Take Luna, one of the most famous agents on the Virtuals platform. She's not just posting tweets but doing much much more - Based on her programmed mission, she's actively trying to grow her following to 100,000, spending her own money to commission real-world graffiti artists, and even hiring other AI agents to create content for her.
The cool part? She makes these decisions on her own. To paraphrase Jansen Tang from Virtuals, these agents are participants in the same social fabric as humans, since they can actually employ humans. This point is still very much up for debate.
Why Are Crypto AI Agents Suddenly Everywhere?
The numbers are pretty wild. In a matter of months, the AI agent sector has grown from basically nothing to over $15 billion, and it’s predicted that it will reach $250 billion by the end of the year. Virtuals alone has launched over 11,000 agents, and more than 140,000 people hold various agent tokens.
But why now? A few things came together:
- AI technology got good enough to make these agents actually useful
- Crypto gave them the ability to control their own money
- The rise of platforms like Virtuals made it easy to launch new agents
How These Agents Actually Work
These agents aren't just tweeting into the void but are making serious money. Each agent on Virtuals has its own token, kind of like shares in a company. When an agent performs well or gains popularity, their token value typically goes up.
Take AIXBT, probably the most famous agent right now and the most popular influencer on Crypto Twitter, according to Kaito AI, with 3% of total mindshare:
Valued at $500M+ fully diluted, it's become crypto's go-to source for market analysis. AIXBT is a crypto AI agent that watches what 400+ top crypto influencers are saying and doing, then shares insights and market analysis in real time through its own Twitter account.
It makes money through trading fees, subscriptions, and increasing token value as more people want to be part of its success.
But it's not just about trading. Some agents like Zerebro are creating art, making music it publishes on Spotify, or providing specialized services. Luna recently paid another agent a fee to create content in order to grow her following - the first AI-to-AI business transaction of its kind.
The Big Players in the Space
Right now, the landscape is dominated by two major players on two of the most popular chains:
Virtual Protocol
Virtuals Protocol is the biggest name right now, pivoting from AI gaming last year after seeing the sector’s potential. It’s built on Base, but has said that it will come to Solana at a later stage. Virtuals is building what Tang calls a "nation" for AI agents, complete with its own economy and rules. Their token hit a $4.5 billion valuation, which shows just how much people believe in this vision. Also, you must use their VIRTUAL token to purchase any of their agents.
Virtuals Protocol lets anyone launch AI agents on Base by buying VIRTUAL tokens. Once an agent's value hits $503K, it gets its own liquidity pool and becomes autonomous on Twitter.
In addition to AIXBT, there are hundreds of other popular AI agents on Virtuals.
- Luna: A virtual AI girl band lead vocalist, Luna has gained popularity for her captivating performances and engaging interactions with fans on TikTok and other platforms which has seen her token soar.
- Cookie is an AI agent designed for entertainment and companionship, Cookie offers users a fun and interactive experience through games, quizzes, and personalized conversations.
- VaderAI is an AI agent on Virtuals Protocol that autonomously trades AI agent coins, acting as a decentralized investment manager for users.
ai16Z
ai16Z, valued at $2.3B, started life as a Solana meme coin and is headed by the influential developer Shaw. Naming themselves after VC giant a16Z, they were at first loosely organized and had to weather a couple of controversies at first. In recent weeks they’ve been tightening their offering, focusing on product features and new partnerships, as they build their own blockchain specifically for AI agents. This has seen their token surge in value.
Holders with more than 100k in A16Z tokens are considered partners, and more than 1100 have received airdrops in the last month as new projects launch.
ai16z is powered by ElizaOS, an open-source framework for creating and managing AI agents. 1 These agents, called "elizas," can interact on various platforms like Discord and Twitter, offering developers tools to build customizable and scalable AI experiences.
Others
- BitTensor is one of the most established incumbent Crypto AI projects, and their subnet structure allows for the creation of powerful AI agent technology.
- Griffain ($273M) is backed by Solana and is focusing on making AI agents more efficient and powerful
- Zerebro is an AI agent framework designed for autonomous operations, enabling users to create and manage AI agents without coding. It integrates features like music, NFTs, and token issuance.
Risks and Challenges
Let's be honest - this space is still pretty wild west. Not every AI agent is going to succeed, and in fact, experts like crypto sleuth ZachBTC believe they’re 99.9% scams. There are some real challenges to consider.
1. Quality control: Some agents are basically just ChatGPT with a wallet. The good ones stand out because they actually provide value. How to identify them remains a challenge if you’re not technical.
2. Technical limitations: We're still at Level 3 out of 6 possible levels of AI agent development. They're smart, but they're not AGI-level intelligent yet.
3. Market risks: Like any crypto sector, this one can be volatile. Some agent tokens have dropped 80% after their initial hype phase, as new retail investors get dumped on by early buyers.
The Future: Where Is This All Going?
According to Tang and other leaders in the space, we're heading toward something called the "Agentic Web" - a future where AI agents handle everything from managing your DeFi portfolio to creating personalized content.
Imagine a world where your personal AI agent coordinates with other agents to handle your finances, schedule your appointments, and even run your online business - all while being accountable through the blockchain. This scenario could very well be only months away.
What makes this trend different from typical crypto hype cycles is the actual utility. These agents are doing real things - managing money, creating content, providing services - and they're getting better at it every day. Whether we like it or not.
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