Investors with Insight Continue to Wager Heavily on AI-Backed Meme Cryptocurrencies

Memecoins with an AI theme are still popular among Smart Money portfolios, with significant investments in Fartcoin, Virtuals Protocol, and Aixbt. However, experts caution that the excitement may not persist.

As per Nansen's Smart Money dashboard, the largest investment of Smart Money is currently in Fartcoin (FARTCOIN), which has $28.68 million spread among 76 investors. Virtuals Protocol (VIRTUAL) comes next with $11.04 million held by 97 investors, while Aixbt (AIXBT) ranks third with $4.74 million distributed across 63 investors.

All the top three tokens have shown substantial weekly gains, with FARTCOIN leading at a 98% increase, followed by VIRTUAL at 25% and AIXBT at 32%. According to cookie.fun, these three tokens are among the top 10 AI agents by mindshare, with FARTCOIN having a dominant share of 13%. The increase corresponds with a broader recovery in the AI memecoin sector, as the market cap of AI memecoins has risen by 8% in the last 24 hours.

Despite the current optimistic sentiment, experts remain doubtful about the long-term sustainability of AI memecoins, arguing that many of these tokens are merely memecoins taking advantage of the AI hype cycle.

Haseeb Qureshi, managing partner at Dragonfly Capital, believes that AI memecoins are currently in a speculative phase but lack lasting value.

"These things are not really agents. These are chatbots with memecoins attached; they have barely any agentic qualities beyond posting on Twitter," wrote Qureshi in his post on X.

He anticipates that the novelty of AI-driven memecoins will continue until 2025 as crypto investors tend to hold onto trending narratives for a long time. However, by 2026, he predicts that the hype will wane. As for revenue, he explained that these projects will likely move away from memecoin-based monetization and instead adopt traditional revenue models like sponsorships, affiliate marketing, and token promotions.

"The chatbots will become so common that people will get tired of them. Sentiment will reverse. Seeing stories of their favorite human key opinion leaders (KOLs) losing their livelihoods will spark a kind of class consciousness. Users will start favoring human KOLs, even if their content is less consistent," he explained.

Similarly, Qubic Ecosystem Representative Alberto Fernández views AI memecoins as a temporary trend that will eventually give way to more utility-driven digital assets.

"Over the next year, I think we’ll see memecoins evolve into ecosystems that combine entertainment and community. However, I believe this could mark one of the final stages before the memecoin bubble starts to burst, making way for cryptocurrencies that offer utility beyond just leveraging their community," he said.

In conclusion, while Smart Money is currently heavily investing in these AI memecoins, it remains uncertain whether these investments will be profitable in the long run, and experts are skeptical.