AI + Crypto = ???
AI on Crypto Market: Agents, Prompts and Skepticism
Cryptocurrency is one of those topics that we rarely mention here but today AI is one of key narratives in Crypto and we want to check what’s going there.
Of course, we'll do this with a degree of common sense skepticism.
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AI Agents | The New Trend in the Crypto Market
According to Kaito, in early December 2024, the AI and memecoins narrative captured more than half of the 'crypto Twitter' mindshare.
And it's all thanks to cryptocurrency AI agents. They function similarly to bots but use LLMs for interaction, which investors love. Agents also have the autonomy to perform various tasks such as analyzing the blockchain, providing contextual responses on social media, and participating in trading operations.
How it Works in Real Life | AI Agent Tool
So, the case we are talking about was recently published as a thread on X. In less than a week, he went from $3.1K to $12.8K using an AI agent for trading.
We are not offering the information below as a strategy or financial advice. And while it looks very plausible, we can't rule out that it's a fake.
The thread's author experimented with “Sniper,” developed on the Griffain platform. It’s trained on data from Pump.fun and can identify patterns of which types of memcoins are rising, which ones are falling, and so on.
When you give it access to your wallet, you can implement a trading strategy using prompts. Like this one:
I’ve put [Amount and currency] in our shared wallet. Analyze new memecoins as they launch on Pump.Fun and only invest in them if you think they’re likely to increase by at least [The percentage you choose] in the next [number] days. And invest a maximum of [Amount and currency] per memecoin.After that, the AI agent will start working and follow your instructions.
The main thing to remember is that AI is not omnipotent, and you cannot ask it to “invest in the next Bitcoin.” Such an approach is likely to fail.
However, the author managed to pick the correct prompts and multiplied a lot of capital in just four days. Here is his result:
That's the way it is. If you have a great desire (like me) to test this AI agent, we must disappoint you. At the moment, Sniper is in the closed testing stage with invite-only access.
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AI Projects to watch in Crypto in 2024
AI crypto tokens represent a niche segment of the cryptocurrency market that combines blockchain technology with AI. They serve multiple purposes within AI-driven projects and ecosystems. Here are the tokens that performed the most outstandingly in 2024.
Virtuals Protocol (VIRTUAL): An AI-focused launchpad on Ethereum's Layer 2 network, Base, enabling users to create and monetize AI agents without technical skills. Its VIRTUAL token acts as a governance and utility token.
Increase in market cap during the year: +3,500%.
Fetch.ai (FET): A decentralized platform for autonomous economic agents operating across multiple blockchains. Recently merged with SingularityNET and Ocean Protocol to form the Artificial Superintelligence Alliance, it allows users to create agents for data sharing and resource management.
Increase in market cap during the year: +930%.
NEAR Protocol: A scalable blockchain designed for decentralized applications, particularly AI. Its technology improves transaction speed and reduces costs, making it an attractive platform for developers building AI apps.
Increase in market cap during the year: +256%.
Render Network (RNDR): It’s a network that connects users needing GPU rendering power with GPU owners, using the RNDR token for transactions. This decentralized platform provides rendering services for 3D graphics and AI computations, incentivizing GPU providers while ensuring fair compensation.
Increase in market cap during the year: +221%
Bittensor: A protocol that incentivizes machine intelligence development through a mining system. Users earn TAO tokens by providing computational resources or developing neural networks.
Increase in market cap during the year: +147%
The overall AI token market growth rate is expected to increase at a CAGR of 208% in 2024.
Common Skepticism
In terms of challenges, AI in the crypto market has the following drawbacks:
AI relies on historical data and patterns, which may not always predict the wild, real-time fluctuations driven by news, market sentiment, or regulatory developments.
AI agents today are primarily limited to executing strategies that follow established patterns or mimic successful traders, often called copy trading.
In some cases, AI works as buzzwords that attract funding and attention by offering solutions that don't solve commerce's complexities.
Nevertheless, in some cases, these shortcomings do not prevent investors from profitably using AI for crypto trading. And it's always best to be prepared in advance.
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Lets be honest, all these use cases of AI agents in crypto are barely useful at the moment. But there are some simple AI use cases which you can apply to learning and building in crypto & web3.
How Everyone Can Use AI for Crypto (With Free AI Tools)
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