What are AI Agents in Crypto? A Detailed Guide

Artificial intelligence agents are software programs that use a range of advanced technologies to perform complex tasks. They can handle everything from portfolio management to automated trading and much more.

AI agents can integrate with various APIs, pulling real-time data from platforms like TradingView and CoinMarketCap. They can also connect with centralized exchanges and smart contracts – allowing them to take direct action.

In this article, we’ll give you a detailed guide on what AI agents are and how you can use them for your daily crypto tasks.

What are crypto AI agents?

In simple terms, AI agents are software programs designed to leverage advanced technologies to complete complex tasks and learn from experience. They are similar to ChatGPT but capable of completing a much larger spectrum of functions.

That’s because ChatGPT is a Large Language Model – one of the many technologies an AI agent uses to work properly. ChatGPT can only answer questions, while AI agents can complete tasks like portfolio management and automated trading.

Now, there’s also a difference between traditional AI agents and crypto AI agents. Just like any Web3 technology, crypto AI agents tend to be more decentralized because they rely on blockchain technology to store data and execute tasks.

Traditional AI agents and LLMs, like Oracle’s Miracle Agent, rely on centralized storage. These software programs store millions of gigabytes of data on platforms like AWS and Google Cloud. While these systems are designed to handle vast amounts of data, they have one major flow – single points of failure. If the server goes down, so does the AI agent.

You’ve probably experienced times when AI agents or LLMs like ChatGPT just stopped working. That’s often due to AWS or Google Cloud hitting storage limits or failing to properly retrieve stored data. This is where decentralized storage comes in to solve the issue.

Crypto AI agents typically use decentralized storage, which spreads data across a blockchain network of nodes (computers). Each node holds small, encrypted pieces of data that are only decrypted when the AI agent needs them. This makes it much harder for hackers to compromise the data since there’s no central point to attack and, as a result, crypto AI agents are more secure and better suited for handling sensitive or confidential data.

How does an AI agent work?

To properly function and work with large amounts of data, AI agents combined different technologies into one product. They mainly use APIs, and machine learning to handle around 99% of your queries. Here’s how it works:

APIs

To unlock an AI agent’s full potential, it must integrate with APIs. This allows the agent to access real-time market data and provide more accurate answers to your questions.

For example, after you integrate the AI agent with TradingView, it will be able to answer your questions regarding any token listed there, the token’s technical indicators, and more. This will transform it from a simple chatbot to a complete tool.

Processing and generating responses

Once you connect your AI agent to all the necessary APIs, the program turns into a very valuable tool capable of handling complex requests.

For example, you could ask it to generate a technical analysis of Bitcoin. The agent would pull real-time data from TradingView’s API, analyze the information, and write a detailed report on Bitcoin’s market position.

Executing actions

AI agents can perform real-world tasks like placing trades or managing portfolios. For example, you could say, “Buy $1k worth of BTC when the price dips below $80,000.” The agent will understand the request and automatically place the trade for you.

This works with most centralized exchanges and platforms with open APIs. If the platform uses a closed API, you can usually contact the exchange’s support team to request access.

Learning and adapting

AI agents don’t just respond to queries like ChatGPT does – they learn and improve over time.

For example, let’s say you have a big investment into Ethereum. If you frequently ask about the token’s price or news about the project, the agent may start prioritizing ETH updates automatically.

This will make future responses more accurate and relevant

Key use cases of crypto AI agents in 2025

With AI agents, your imagination limits what they can do. Here are just a couple of examples of what AI agents can be used for in 2025:

Portfolio management

It is sometimes hard to track the performance of your portfolio, especially if you invest on multiple platforms and have some savings on non-custodial wallets. To simplify that, you can integrate an AI agent with the APIs of all platforms you use and tell him to give you a daily update on your portfolio.

This way, you’ll always receive updates on your portfolio’s overall performance. You can also ask the agent to provide the accrued performance of each token or each platform.

The AI agent can also analyze the portfolio and advise on what to sell and buy. For example, if you hold very risky memecoins but want to make your portfolio more defensive, you can simply tell your agent: “Please make my portfolio more defensive. Liquidate all the risky assets I have and buy stablecoins”

The agent will analyze your portfolio to identify all the risky assets and sell them. Then, it will analyze the market performance and buy the tokens to make your portfolio less volatile.

Automated/assisted trading

A trading AI Agent plugged into TradingView’s API could probably outperform most unexperienced traders. Traders, especially those who’ve traded a short period of time, tend to make decisions driven by emotions. Studies show that over 20% of traders felt that emotions frequently impact their trading decisions. Unlike humans, AI agents only take rational decisions based on technical analysis.

You can use an AI agent in two ways:

• Automated trading – Let the agent handle everything on its own. It will use the APIs to analyze the market and palace the trades. However, note that AI agents aren’t perfect yet. They often don’t understand the full spectrum of the information an API gives them or can simply not be able to process the amount of data needed to make a good trade. That’s why you should expect some losses if you let the agent trade independently.
• Assisted trading – This is often a better strategy. You handle the analysis and let the agent execute the trades. If your agent is connected to high-quality APIs, it can provide real-time updates on technical indicators, helping you make more informed decisions.

News and market updates

AI agents can help you with in-depth fundamental analysis. Let’s think of a scenario where you consider buying Cardano and holding it for a long period of time, but you don’t know anything about the project.

To tackle that issue, you could also ask the agent to create a detailed report on Cardano – including how it differentiates itself from other Layer 1 blockchains – and track project progress over time. This could cover updates, daily active wallets, and both on-chain and off-chain data.

Combining this data with a technical analysis report from your agent would make it easier to decide when and if to place a trade. Without an AI agent, this process would take much longer and wouldn’t be nearly as efficient.

Top crypto AI agents on the market

AI agents can become essential tools in the Web3 industry. They automate complex processes and help traders and investors get a better understanding of what the market is doing. Let’s take a look at two of the biggest crypto AI agents existing on the market right now:

Fetch.AI

FetchAI, now a part of the Artificial Superintelligence Alliance, was the first decentralized AI platform on the market. Founded in 2017, FetchAI specializes in the creation of AI agents that can interact with DeFi platforms and make conscious decisions.

The platform has developed its proprietary AEA technology. This development allows AI agents created on FetchAI to operate independently – learning from their experience and making decisions on their own.

These AI agents can interact with smart contracts, make automated trades, and even handle supply chain management issues with zero human intervention.

Virtuals Protocol

Virtuals Protocol took AI agents to a whole other level with its Generative Autonomous Multimodal Entities system. This technology allows AI agents to interact through text, voice, and even ANIMATIONS. Now, developers can use Virtuals Protocol to integrate AI agents directly into a game. Imagine fighting an AI-powered boss that could learn from your movements and get gradually more complex as it learns your patterns.

Virtuals Protocol simplifies AI integration for developers through plug-and-play API and SDK solutions. Its ICV system ensures that contributions to AI development are recorded on-chain, enabling transparent and fair revenue distribution.

Another important innovation that the Virtuals Protocol introduced is the Initial Agent Offering. This technology allows developers to tokenize their AI agents and sell them as fractional assets. For example, an IAO allows users to lock VIRTUAL tokens to create a new agent token.

Benefits and risks of using an AI agent

AI agents aren’t perfect. Like any modern innovation, they have advantages and disadvantages. Only by balancing these two can you squeeze out the most profit from using an AI agent in your daily tasks.

Advantages of using an AI agent

• Speed: AI agents are much faster than you. They find and analyze information in seconds, while you need hours to process the information you need. If you provide clear instructions, an AI agent can save you significant time in the long run.
• Cost Savings: Instead of hiring a portfolio manager or paying for third-party financial analysis tools, you can use an AI agent. Over time, this can save you thousands of dollars, making your financial activity more profitable.
• Efficiency: Think of an AI agent as a friend who knows the answer to everything and can instantly access any website or data source. That’s essentially what an AI agent is – a very smart assistant that can quickly retrieve and process information.

Disadvantages of using an AI agent

• Over-reliance on the agent: Users tend to give AI agents too much responsibility with time. This can lead to fatal mistakes and a lot of losses, especially if you give it full access to your funds on an exchange. Use the AI agent with caution and always remember that you are smarter than him, even though it holds more information.
• Limited understanding: The AI agents aren’t yet comparable to the human mind. The agent might not be able to integrate fundamental analysis into its price prediction as it doesn’t comprehend all the complexities of the world economy.
• Data accuracy: Even though AI agents are connected to real-time APIs, the data they provide can sometimes be slightly delayed. For example, if Bitcoin’s price is currently $100,000 but was $102,000 ten seconds ago, the agent might still give you the outdated $102,000 price.

The future of AI agents

The future of AI agents in crypto holds enormous potential. As AI technology advances, we can see the rise of decentralized AI economies where autonomous agents interact, trade services, and manage resources without human input. This could create a self-sustaining digital ecosystem.

AI agents are also expected to drive widespread Web3 adoption by simplifying complex blockchain processes and making them more accessible to everyday users. For instance, AI agents could automate wallet management, facilitate transactions, and provide real-time market insights, reducing barriers to entry for non-technical users.

In the DeFi space, AI agents could unlock advanced yield optimization strategies, improve risk management, and enable collaborative investing by analyzing market trends and predicting outcomes more accurately.

As AI agents continue learning and adapting, they will likely become essential tools for navigating the rapidly evolving crypto landscape, making blockchain technology more user-friendly and efficient.

Closing thoughts

With the rapid development of AI technologies, crypto AI Agents can become crucial for traders and investors all around the world. Projects like FetchAI and Virtuals Protocol have already helped thousands of people create AI agents specialized in different areas of crypto: portfolio management, automated trading, and more.

These protocols have also performed great on the market. However, buying them all would require a lot of time and access to different centralized exchanges. That’s why, at Trakx, we have created the AI Agents Crypto Tradable Index (CTI), which includes the top 20 AI Agent tokens equally weighted and automatically rebalanced on a monthly basis.