AI agents: The inside scoop

In this report:

• Why the hype?
• 2 ways to get exposure to the AI narrative
• The trades we are eyeing executing
• The best investing strategy to get exposure to the narrative

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

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Why the hype?

Let's start from the top. The hype around AI Agents is mainly due to the mixing of the two most hyped things of the year: AI and memecoins. They both had an insane year in 24' with NVIDIA alone pumping 200% and multiple memecoins going from the low 10s of millions to the billions. The wealth effect over both these sectors has been confirmed.

Then we had $GOAT, the Solana memecoin by AI Influencer Terminal of Truths, that went to $1B in only a couple of days. It shocked the market and showed that memecoins adopted by AI Influencers could have real traction. And that was all the space needed.

The AI Agent market has grown from a sub $1b dollar space to now being valued at over $16b since then. Simply speaking, AI just stole the show with over 60% of mindshare across social media. Other sectors don't even come close.

With such a meteoric rise, tons of runners like AIXBT, AI16Z, and Fartcoin were born. However, the space is still young, and there are many ways to get exposure.

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2 ways to get exposure to the hype

We see two ways to get exposure to the AI narrative at the moment:

• betting on AI infrastructure (frameworks)
• betting on individual AI agents.

Let's go through them one by one.

Infrastructure

So, what are frameworks? Essentially, frameworks are like building blocks that AI Agents are built on top of. And while there are quite a few to choose from, we want to start by highlighting the most popular one: Virtual's G.A.M.E.

Virtuals

Virtuals, which we first mentioned at around a $300m market cap (now sits at $4b), is the one-stop shop for creators looking to launch their own AI Agents. They also allow easy functionality to monetise through revenue-sharing by launching tokens along with the AI Agent.

Their newest addition, GAME (Generative Autonomous Multimodal Entities) allows the creators to have more freedom with the Agents they want to create.

This setup allows creators to specifically curate the personality and vibe of the Agent without needing to know any code which is genuinely groundbreaking. On top of that, it is also done in a safe environment so creators can stress test their creations before letting them roam free.

While Virtuals itself has been out for a while, GAME only recently came out, and the stats speak for themselves. With over 200 projects being built on top of it and 150k+ daily requests we can see that people do indeed like the tech.

With the release of GAME, Virtuals also prescribed GAME its own token. Currently we would not look to invest in this token at the moment as it is now looking to find its actual value after a meteoric rise of 6,000% in 36 days. That being said, we would look to see how it reacts in the $100m region and look for prices to rise from there before taking a position.

Overall, we are bullish on Virtual's GAME as it is being used a lot by the AI Agent community and is very effectively streamlining the creation of AI Agents. It is one of the strongest AI infrastructures out there, along with $Virtual itself. That being said, at the moment we would advise caution when acquiring the token until it finds a base and puts in some medium timeframe bullishness.

AI16Z

The next infrastructure play is AI16Z's ElizaOS which is an operating system for AI Agents. This asset caught our attention pretty early as well. We shared this asset as a trade on our Discord when it was below $0.88, and it reached $2.41 in 7 days. That is 173% in a week. We suggested taking profits above $2.

It was a good catch, but now let's look at what this asset actually is. Unlike Virtual's GAME, ElizaOS is a more developer-focused tool built using Typescript. Therefore, it is more developer-focused, and it allows for deeper complexity in the AI Agents it creates. However, this means it is less normie-friendly, as you need to be semi-well-versed in running code to run it.

That being said, this hasn't stopped the overall adoption and use of this product, in fact, the growth is quite astounding. As we can see from the star history graph, the usage of ELIZA isn't slowing down; rather, it's picking up - more and more developers are using this framework.

Now, let's look at the chart. We can see that it has experienced quite a severe pullback of almost 60% in just a few days. However, this is quite common in low market-cap coins.

Now we are back at the $1b mark, which typically provides support for high mindshare coins. That being said, we aren't too inclined to buy here and would be more comfortable dipping our toes in this asset after it shows us on the chart, with time, that buyers step in at the $1b dollar level.

All in all, it is very clear to see that AI16zs Eliza is a good product being used by many developers and should continue to grow as the AI Agent sector grows as well. From an immediate investment standpoint, we give the tech a green light and currently a red light until we see some strength in the chart.

Griffain

Our final interesting infrastructure play is Griffain. Griffain is a service that allows you to create your own AI Agent that can do on-chain tasks for you. It is a combination of DeFi and AI, commonly referred to as DeFAI.

While the explanation is simple, it goes a bit deeper than that. What this means is a user can create an Agent, give it a wallet, fund it, and then tell the Agent to run tasks for the user. To us, this is really cool as it takes away so much friction that is usually found in using your own wallet to do things like finding applications, bridges, etc.

For example, you can ask it to swap tokens for you, view token holders, fetch information from websites, and much more. And all this is done through the simple UI below.

We think this idea is amazing as it really simplifies the process of interacting on-chain for the retail user, and it also allows for a safer environment.

Looking at the chart below, we can clearly see that it is going through a correction while making higher lows. While we were initially cautious that the asset wouldn't hold an uptrend due to macro, it bounced back very convincingly from around the $200m-$300m region.

As a result, this price action is very bullish and is showing strength. The inflation data will come out today, so we are still a bit cautious at the moment. However, if we see a sell-off and the price retests that uptrend around $0.3 - $0.35, we will be looking for buys in that region. This is the play we are most interested in at the moment from the infrastructure pack.

Okay, now, let's move from infrastructure plays to individual AI agent plays.

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AI agents

AI Agents are the new kids on the block in the crypto space. Massively overtaking the "animals" as the hottest things on the block. Why are they so popular? Well, AI agents have managed to mash together two exciting frontiers: meme coins and AI Agents.

Thanks to Truth Terminals and $GOAT, tons of new AI Agents have launched. This has led to waves of AI agents flooding the market, with a select few quickly going from the low millions to a billion in a couple of days. This outburst has been quite the sight, and while it is showing signs of froth, we think some agents are worth mentioning.

AIXBT

One such agent that is gaining popularity is AIXBT. This agent is an AI Influencer who is trained to give out investing advice in the crypto space while sounding entirely native to it at the same time. On top of this, it responds to almost every single question that is asked by users, both big and small, which to us is pretty cool as most "big" influencers only respond to a select few people.

It also runs a terminal wherein it finds things early and provides users with intelligence. This token-gated platform currently costs over a quarter of a million dollars to access it.

From the analytics of AIXBT's X page, we can see that it continues to grow in reach and in followers.

Furthermore, it has been featured in Forbes and many other mainstream publications. It is the leading AI agent, and it has become the #1 influencer in the crypto space, overtaking even human accounts. It has one of the strongest charts in crypto and is going into price discovery at the moment. We would be looking at taking the trade if it successfully turns the $0.65-$0.66 region into support.

Overall, we are quite bullish on AIXBT as an influencer and as a product, as it is really showing the rest of the space just how real and useful these AI Agents can really be. From an investment standpoint, the chart looks really strong.

FARTCOIN

Fartcoin is a coin that has gained massive TradFi popularity due to its vulgarity and fun aspect. Coining the term "hot air rises," it managed to rise over 10 times in a month due to the traction it picked up. Unlike the previous agents, it isn't too much an agent itself but rather an idea that the popular Truth Terminal came up with.

So, an anonymous developer launched it in a fair way, and since then, it has risen, eclipsing and over doubling the original GOAT token adopted by Truth Terminal itself. From the analytics, which is looking at the community-run page, NOT an AI Agent, we can see that growth remains steady across all metrics.

Additionally, while looking at the chart, we must admit that while it looks bleak, a lot of coins take pause when battling the $1b dollar mark. Meaning again this is the time to look for a base to form and positive price action to ensue. We don't want to buy price discovery; rather, we want to buy price consolidation.

We think this meme, while being quite strong, misses the pure AI Agents' narrative of things. That being said, Truth Terminal is the OG of AI Agents, and as we can see in the chart, the people like the coin.

On top of that, its web2 fame is not to be slept on either. With the likes of NBC, CNBC, and the host of The Late Show talking about the coin, it definitely has traction. Because of this, we think it's best to keep an eye on it to regain bullish momentum before potentially dipping our toes because, as the saying goes, hot air does indeed tend to rise.

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Cryptonary's take

When thinking about the AI Agent narrative as a whole, we are hard-pressed to see how every AI Agent can maintain stickiness as they deal with the problem that most of them aren't really AI Agents, mostly just AI chatbots with memecoins attached to their names. Furthermore, the repetition of the same idea with a different face can get boring quickly, as it did with most memecoins. There are only so many ways to skin a cat.

On the flip side, we do think that some AI agents that are unique, creative, and normal can stick around. Additionally, in a couple of months, AI agents will likely be seen as more than chatbots with memecoins and will have real functioning on-chain capabilities. We've seen this already with the likes of Luna by Virtuals.

Nonetheless, we are infinitely more bullish on the infrastructure for the Agents over the individual ones themselves. This is because as the industry goes on, more of the infrastructure will be used to progress it while it is likely an infinitely greater amount of AI Agents will get created.

Therefore, if we were to allocate capital medium to long-term, we would prefer allocating it to infrastructure plays rather than to an individual agent. But regardless, we presented you with two plays from both sectors. Both look ready to take off. However, the investment decision should take into consideration macro context as well.

Overall, we are quite bullish on AI Agents as they have been able to be something both TradFi and the crypto space can get behind. We see that through multiple important figures like Marc Andresson, talk show hosts like Stephen Colbert, and even Elon Musk talking about them.

Cryptonary, OUT!!