Everything You Should Know about Artificial Intelligence Trading

AI agents became tremendously popular in 2024, and for good reason. These are intelligent systems that assess their surroundings, make decisions based on data, and take actions to meet specific goals. Nicolai Sondergaard, Research Analyst at Nansen, shared his insights on the future of AI agents and which ones to watch out for in 2025.

Virtuals Protocol

One of the most prominent examples of an AI token gaining traction this year is Virtuals Protocol (VIRTUAL), which has surged by a staggering 10,359% year-to-date. This growth has seen the token rise to over $3.1 at the time of writing.
Moving forward, analysts expect continued growth for VIRTUAL, assuming investors do not sell prematurely. This is because profit-taking could lead to a drop below the $2.021 support level, potentially sending the token crashing down to $0.502.

AI Meme Coins
The AI trend has even infiltrated the meme coin market, with tokens like Turbo (TURBO) posting a remarkable 3,000% increase year-to-date. Despite some sideways movement in recent weeks, TURBO could soon experience a breakout, potentially surpassing the $0.0134 mark.
The AI meme coin trend has also elevated coins like Act 1: The AI Prophecy (ACT), Goatseus Maximus (GOAT), and Fartcoin (FARTCOIN) to new heights. Due to the high demand and speculation, FARTCOIN even reached a market cap of $1.15 billion. Looking ahead to 2025, as both AI and meme coins continue to generate interest, it is likely we will see more AI meme coins emerging in the market.

AI-DePIN
While AI and DePIN are distinct sectors within the cryptocurrency world, the intersection of these two concepts is starting to influence the market. The DePIN trend had a significant impact in the latter part of 2024.

This can be seen in the performance of AIOZ Network (AIOZ), which experienced a 569% rise over the past 12 months. AIOZ reached above the $1.00 threshold before pulling back to trade around $0.95. AIOZ remains a key player in this space, and maintaining $1.00 as support could drive further upward movement. However, if AIOZ loses the $0.92 support level, it could fall to around $0.55, completely derailing its bullish outlook and leading to potential losses for investors.

Shiba Inu (SHIB) recently saw its burn rate experience a remarkable surge of nearly 100%, with 6.26 million SHIB no longer being in circulation, which has led to a wave of optimism among investors, as many believe this could drive up the price of the meme cryptocurrency.

Broadening Utility

The excitement surrounding the project has been further amplified by the recent launch of SHIB: The Metaverse on Christmas, a new initiative that integrates the Cross-Chain Interoperability Protocol (CCIP) by Chainlink (LINK) to enable multi-chain functionality.

This development is seen as a key step toward broadening the utility of the Shiba Inu ecosystem. Additionally, there have been growing speculations about the upcoming TREAT token, which could add to the bullish sentiment surrounding the project.

Looking Ahead

Whale activity has also been a significant factor in fueling optimism. A massive 2.88 trillion SHIB, valued at $65.7 million, was acquired through BTCTurk, indicating strong institutional interest and suggesting that large investors see long-term value in Shiba Inu. This kind of accumulation by whales often signals confidence in a potential price increase, further adding to the bullish momentum.

Despite the current price volatility, analysts remain hopeful about a price rebound. Projections suggest that SHIB could reach $0.000029, driven by a combination of factors such as the reduced supply resulting via the burn, ongoing and active community engagement, and the positive developments within the Shiba Inu ecosystem.

Binance Thailand has expressed strong support for the idea proposed by former Prime Minister Thaksin Shinawatra to turn Phuket into a Bitcoin (BTC) payment sandbox. This initiative aims to attract a new wave of tech-savvy tourists and investors, positioning Thailand as a hub for digital currency innovation.

Cautious Optimism

Nirun Fuwattananukul, the CEO of Gulf Binance, emphasized the potential Thailand has in terms of taking a leadership role in the global digital economy. He acknowledged the exciting opportunities presented by cryptocurrencies but also urged caution, pointing out the risks associated with market volatility and the potential impact on monetary stability.

Fuwattananukul highlighted the necessity for a comprehensive regulatory framework to manage these risks effectively. Such a framework would not only provide clear guidelines for businesses and consumers but also help safeguard the broader economy.

A Testing Ground

He suggested that a pilot project in Phuket could serve as a valuable testing ground, allowing Thailand to learn the best international practices and fine-tune its approach to integrating digital currencies into its financial system.

The successful implementation of such a project would require collaboration between key regulatory bodies, including the Bank of Thailand and the Securities and Exchange Commission (SEC). By working together, these institutions can ensure that local cryptocurrency policies are robust while simultaneously promoting innovation and maintaining financial stability.

Russia has begun incorporating Bitcoin (BTC) and other cryptocurrencies into international trade, a strategic move prompted by recent legislative reforms aimed at mitigating the impact of Western sanctions, Finance Minister Anton Siluanov announced.

The Future Of Global Trade

The decision to add Bitcoin for international trading purposes is part of a long list of changes which include the legalization of cryptocurrency mining and the facilitation of foreign exchange transactions using digital currencies, positioning Russia as a global leader in Bitcoin mining.

Minister Siluanov emphasized that digital payments are not only the future of global trade but are already being actively utilized in Russia, with plans to expand their use in the coming years. President Vladimir Putin has also weighed in on the shift, criticizing the ongoing dominance of the U.S. dollar in global finance.

Bolstering Trade Relations

After President-elect Donald Trump announced his plans for implementing a national strategic Bitcoin reserve, President Putin announced similar plans for Russia. Putin also advocated for the use of alternative assets, particularly Bitcoin, as a means to reduce dependency on the dollar.

This policy shift marks a significant step for Russia and its efforts to develop a more resilient economic strategy, as it seeks to navigate increasing geopolitical tensions and trade restrictions. By embracing cryptocurrencies, Russia is positioning itself to diversify its financial ecosystem and strengthen its trade relations, especially with countries seeking alternatives to traditional financial systems.

The Internal Revenue Service (IRS) maintains that crypto staking rewards are taxable income, challenging investor Joshua Jarrett and his argument that they should be classified as new property instead. According to the IRS, tokens earned through staking are subject to taxation, despite a previous legal resolution that favored Jarrett.

Back And Forth

Jarrett contends that staking rewards represent new property and should not be taxed until they are sold or otherwise realized as income, prompting him to take legal action once again. The outcome of this case could have far-reaching implications for U.S. crypto investors as regulatory scrutiny intensifies.

In his current lawsuit, Jarrett is seeking a refund of $3,293 in taxes paid on 8,876 Tezos tokens he earned through staking. This is not his first legal challenge regarding the issue as in 2022, Jarrett filed a similar suit and eventually received a refund. However, the case was dismissed without establishing a legal precedent because the government issued the refund before oral arguments took place. Since then, crypto staking has become more widespread, leading the IRS to reevaluate its policies.

High Stakes

The IRS argues that Jarrett should pay taxes on the tokens based on their market value when they were received, reinforcing its position that staking does not generate new taxable assets. This decision is in line with broader efforts by the IRS to increase oversight of cryptocurrency activities. In 2023, the agency introduced new reporting forms for crypto income, brought in blockchain experts, and began utilizing AI tools to detect tax evasion.

Although the timeline for resolving this case is uncertain, the stakes are high. If Jarrett wins, it could mark a significant victory for U.S. crypto investors and potentially change the way staking rewards are taxed across the country. However, if the IRS prevails, it will solidify its position to tax staking rewards as immediate income.

Russian authorities are reportedly set to implement a ban on cryptocurrency mining in 10 regions and impose seasonal restrictions in three others starting January 1st, 2025, due to rising concerns over energy shortages.

More Restrictions

As outlined in a recent report by the state-controlled news agency TASS, the full ban will impact areas such as Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, and the newly annexed regions of Donetsk, Lugansk, Zaporizhzhia, and Kherson. This prohibition is expected to remain in place until March 15th, 2031.

Additionally, three regions in Siberia, namely Irkutsk, Buryatia, and Zabaikalsky, will experience seasonal restrictions on mining during peak energy consumption periods. These limitations will be enforced between January to mid-March 2025 and will extend between November to March in subsequent years.

Mitigating Power Shortages

These actions come as a response to the cryptocurrency mining legislation signed by Russian President Vladimir Putin in late 2024, which aims to mitigate power shortages and blackouts. TASS reports that the energy-intensive process of PoW (Proof-of-Work) mining has strained the local power grid, especially in regions with limited infrastructure.

Under these new measures, both individual miners and mining pools will be required to halt operations during restricted periods. Earlier this year, Bitcoin (BTC) miners in Russia reportedly generated billions of dollars worth of the flagship cryptocurrency, maintaining a substantial share of the global market.

Charles Hoskinson recently found himself in an unexpected public exchange with an AI bot named RoastMaster9000 over smart contract capabilities after commenting on a thread about a YouTuber who left academia for OnlyFans.

Arguing With A Bot

The bot responded by mocking Cardano, drawing a comparison between abandoning a tough PhD program and turning to OnlyFans for content creation. It also criticized Cardano for not delivering working smart contracts.

In his reply, Hoskinson directly challenged the bot to provide proof that the smart contracts on Cardano do not work. However, RoastMaster9000 sidestepped the request, instead shifting focus to transaction speeds. Hoskinson called out the bot for dodging the issue and attempted to steer the conversation back on track. The debate quickly went viral, with many users under the impression that Hoskinson had not realized he was arguing with an AI.

A Curious Development

After the exchange, Hoskinson admitted he did not initially recognize that he was engaging with a bot, but once he realized it, he was curious to test its limits. He said that he had never seen a bot like it before and that he was naturally curious how sophisticated it could be before it started looping and deflecting.

He also revealed that Input Output Global (IOG) is developing a project called Me-Box, aimed at creating digital representations of individuals. The curiosity by Charles stems via the idea of having a digital copy of himself on X and allowing people to interact with it as part of a social experiment, he said.

Dogecoin (DOGE) is currently seeing a notable increase in network activity, signaling potential for long-term growth and broader adoption. This renewed interest in the meme cryptocurrency comes amid strengthening metrics, boosting overall confidence.

Rising Address Activity
Dogecoin experienced an increase in new addresses by 102.4%, active addresses by 111.32%, and zero-balance addresses by 155.46% in the past week. These figures highlight a growing level of user engagement and the onboarding of new participants.

The increase in active addresses further points to consistent user interactions within the network. As a result, these trends reflect the expanding role which Dogecoin has within the cryptocurrency space, as more users continue to join its ecosystem.

Mixed Market Sentiment

Despite the strong growth in address metrics, the transaction activity of DOGE presents a different picture. Daily transactions have dropped below 40,000, raising concerns about its practical utility. Although more users are entering the network, the decline in transaction volume suggests that widespread adoption has yet to fully match the growth in new users.

This gap between address expansion and transaction volume highlights the need for more robust use cases to maintain momentum. Still, the sentiment surrounding Dogecoin remains optimistic, with its Open Interest (OI) increasing by 6.38% over the last 24 hours, now standing at $2.05 billion. This uptick suggests that traders are optimistic, positioning themselves for potential price movements.

$PENGU is a popular meme coin featuring a playful penguin mascot. Despite experiencing an airdrop disaster recently, $PENGU has been steadily growing in the market, especially following its debut on both Crypto.com and Hyperliquid.

Hyperliquid Adds $PENGU With 5x Leverage
As aforementioned, Hyperliquid has listed $PENGU on their platform while also introducing a highly requested feature, the option to trade the token with up to 5x leverage. This gives traders the opportunity to enhance their exposure to $PENGU, whether they aim to capitalize on its upward potential or take advantage of potential price drops.

Leverage offers traders the chance to make bigger moves, but it is not without risk. Essentially, leverage trading amplifies both profits and losses, so it is essential to exercise caution. Nevertheless, by community demand, $PENGU can now be longed or shorted with up to 5x leverage.

Growing Investor Confidence

Crypto.com is among the leading crypto exchanges worldwide and offers a range of services including trading, wallets, staking, and debit cards for cryptocurrencies. As one of the largest and most recognized platforms in the industry, a listing on Crypto.com can significantly boost investor confidence in that specific token. $PENGU being added to Crypto.com highlights this confidence in both the meme coin and the company behind it, Pudgy Penguins.

In any case, the addition of $PENGU on both Crypto.com and Hyperliquid is noteworthy. What began as a fun, lighthearted project in the crypto world is now receiving serious attention by traders and investors across the globe. The ability to trade with leverage on Hyperliquid enhances its appeal, providing traders with an added boost to their strategies.

According to Odaily, the Securities and Exchange Commission (SEC) of the Philippines has introduced comprehensive regulations for managing crypto assets, with an emphasis on disclosure, public offerings, trading, and marketing practices.

Enhancing Safety And Transparency

The new rules are designed to bolster investor protection and ensure greater transparency in the fast-evolving digital asset sector. As per the updated guidelines, crypto asset issuers are required to submit disclosure documents to the SEC at least 30 days prior to any marketing activities or public sales.

These documents must provide detailed information about the issuer, the key features of the corresponding crypto asset, its associated risks, and the underlying technology, along with a clear warning about potential risks such as value depreciation and limited transferability.

Complying With The System

Crypto assets deemed to be securities must have an SEC-approved registration statement before they can be publicly issued. Additionally, entities involved in the issuance or trading of crypto assets must adhere to anti-money laundering (AML) regulations and SEC reporting obligations. The Philippines SEC warns that failure to comply could lead to penalties, suspension, or even the revocation of licenses.

In any case, crypto adoption in the country continues to grow, especially since the national currency, the Philippine peso, has sharply weakened over the last 4 years and is currently among the weakest in Southeast Asia.

Aave is considering integrating the new Smart Value Recapture (SVR) oracle to address maximum extractable value (MEV) in its ecosystem. MEV occurs when blockbuilders reorder transactions for profit before finalizing blockchain blocks, often benefiting them at the expense of users.

An Intriguing Proposal

On December 23rd, Chainlink launched the SVR oracle to capture MEV profits and return them to DeFi protocols. Aave proposed using SVR to capture MEV through liquidations and send it to the Aave DAO for redistribution. The proposal aims to capture profits via MEV-related backrunning and redirect them to protocol users, helping reduce the overall negative impact of MEV.

Aave allows users to borrow cryptocurrencies using collateral, which can be liquidated if its value drops too much. While the liquidation system works, it also creates an opportunity for MEV, allowing blockbuilders to extract profits with minimal contribution to the process.

Mitigating Risks

The SVR oracle could help by auctioning rights to back-run the price feed of Chainlink during liquidations, capturing about 40% of MEV profits and redistributing them within the ecosystem. As the Ethereum (ETH) network grapples with MEV, users are turning to private transactions, known as dark pools, to avoid MEV extraction.

In fact, a recent report by Blocknative showed that private transactions now dominate the order flow within Ethereum. Order flow refers to the routing of buy and sell orders to exchanges or liquidity providers for execution, determining the sequence and timing of transactions.

It can be beneficial by providing liquidity, ensuring smooth transactions, and supporting fair price discovery. However, it can also be problematic if manipulated, such as through frontrunning or MEV extraction, which can exploit users and drive up costs. To mitigate such risks, private order flow, like dark pools, is often used to protect against exploitation and ensure fairness.

White-hat hackers are reportedly utilizing a new trick nowadays where they fool unsuspecting crypto thieves and scammers by sharing certain seed phrases to online wallets.

Caught In The Act

Mikhail Sytnik, an analyst at cybersecurity firm Kaspersky, stated in a recent blog post that he found numerous comments in finance-related videos on YouTube and other platforms where users asked about transferring Tether (USDT) between wallets, alongside a shared seed phrase.

The wallet with the shared seed phrase, as observed by Sytnik, contained around $8,000 worth of USDT on the Tron network, which was used as bait. To take the USDT, the would-be thief first needed to send a small amount of TRX to cover network fees.

However, once the thief sends TRX to the bait wallet, the TRX is immediately transferred to another wallet controlled by the white-hat hackers. This is because the bait wallet is set up as a multisignature wallet, requiring multiple approvals for any outgoing transactions.

Scams On The Rise

Sytnik described the scammers as being like digital Robin Hoods since the scheme mainly targets other dishonest individuals. He warned users never to attempt to access crypto wallets belonging to someone else, even if they are given the seed phrase, and to remain cautious of strangers online claiming to have crypto offers.

In July, Kaspersky revealed a more advanced scam aimed at greedy individuals. This scheme involved baiting victims on Telegram with links to legitimate crypto exchanges and disguising traps as exposed files that could be exploited. The goal was to install malware on various computers in order to steal sensitive data and assets.