Cryptocurrency investors who bought into the hype of artificial intelligence (AI) themed tokens are now facing losses as prices drop and smart money investors sell off their holdings. Virtuals Protocol (VIRTUAL) and ai16z (AI16Z), which had performed well in 2024, have seen significant price declines, with VIRTUAL falling 43% and AI16Z dropping over 50%. This has resulted in a loss of over $2 billion in market value for these tokens. On-chain metrics indicate that smart money investors and profit leaders have been selling their positions, with some making substantial profits. This behavior is common in the crypto and stock market industries, where retail investors often chase hype and end up holding devalued assets. Despite the recent downward trend, the AI agent industry, which AI-themed tokens represent, is projected to continue growing with a compounded annual growth rate of 40% through 2035.



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