A really smart cryptocurrency trader, with an impressive track record, has amassed nearly $40 million of profit trading AI cryptocurrencies. This asset class is on the market’s spotlight, benefiting from the artificial intelligence (AI) boom and also from massive speculation.
The smart trader in focus here has set a remarkable 89.07% win rate in one month, according to GMGN data and a Lookonchain report. Interestingly, most of his profit came from trading two AI-related meme tokens, ai16z (AI16Z) and Fartcoin (FARTCOIN).
As Finbold reported last week, AI memecoins are surging since late 2024, nearing a $11 billion market cap. AI16Z and FARTCOIN are among the best performing cryptocurrencies that somewhat relate with AI agents or general artificial intelligence applications.
In summary, this Solana address accumulated approximately $19 million of profit with AI16Z, achieving a 6,400-fold return. With FARTCOIN, the same trader profited over $18 million, for a 1,490-fold return from his average cost.
“I’ve never seen such a smart trader!,” said the Lookonchain analyst, referencing this entity’s impressive trading results.
Solana smart trader’s trading history with AI cryptocurrencies
According to the report posted as an X thread on January 7, the trader first bought the ai16z token on October 25, 2024, being an early investor. At that time, ‘5wTLev(…)’ spent 18 SOL, worth around $3,000, to buy 9.16 million AI16Z.
While he is profiting the aforementioned $19 million with this AI cryptocurrency, the smart trader only realized a fraction of it. So far, he as pocketed only $1.71 million of his profits, selling 1.32 million AI16Z. Thus, the trader still holds 7.85 million of the coin.
Notably, ‘5wTLev(…)’ was also early to Fartcoin, making his first purchase at a $83,000 market cap. At that time, the smart trader spent $12,200 to buy 17.31 million FARTCOIN. Then, he sold 6.17 million for $5.41 million, still holding $12.83 million worth of 10.6 million tokens.
In the past 24 hours, Lookonchain reports this address has bought other small-cap memecoins as “lottery plays.”
AI-relate cryptocurrencies and memecoin risks
Finbold has reported many similar stories of traders who have made millions of dollars in impressive returns with memecoins. Recently, for example, we told the story of another ai16z trader who turned $2 million into $21 million.
However, while the winners usually get the headlines, the vast majority of traders speculating on these assets are losing.
Memecoins, and now the currently hyped AI agent cryptocurrencies, have characteristics that resemble financial bubbles. The “Greater Fool Theory” explains the dynamics seen on these speculative tokens, moved primarily by social hype and buzz without significant organic demand.
Traders buy the token with the expectation that a “greater fool” will pay a higher price in the future. Nevertheless, the scheme fades away once there are no “greater fools” to continue fueling the price up, often facing liquidity issues and death spirals.
In the meantime, the development of AI agents with real-world impact continues as Sam Altman, ChatGPT’s founder, predicts huge advancements in 2025.
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