Could Buying This 1 Cryptocurrency Make You Rich?

For the year, Venice Token (CRYPTO: VVV) is up a heart-pounding 1,250%. That makes it the top-performing cryptocurrency with a market cap of $1 billion or higher.

For good reason, then, some investors have embraced Venice Token as a potential millionaire-maker and a pathway to life-changing wealth. But is that really the case?

The hottest of the AI cryptos

Artificial intelligence continues to be one of the few bright spots in the crypto market this year. Traditional market leaders Bitcoin and Ethereum are down 12% and 22%, respectively, for the year. Meanwhile, AI cryptos continue to soar much higher.

Of all the top AI crypto stars, Venice Token has burned the brightest, with its 1,250% return. But don't forget about Bittensor or NEAR Protocol, the latter of which is up 133% for the year. Both also represent ways to get exposure to AI via blockchain technology.

Image source: Getty Images.

But investors have latched on to Venice Token specifically because it powers a privacy-focused version of ChatGPT. In other words, you can type in a quick prompt on the Venice AI platform and get a response in the form of text, images, or video. Best of all, your usage of the platform remains anonymous and private, so you never have to worry about large language models training on your personal data in the future.

Anthropic and OpenAI vs. Venice

But here's the thing: You can't simultaneously believe in companies such as Anthropic or OpenAI and Venice at the same time. Their vision of AI is very different. Anthropic and OpenAI are pushing a vision of centralized AI, in which the majority of power and control lies within the corporation. Venice is pushing a vision of decentralized, privacy-focused AI built with blockchain technology.

And that's where things get tricky for investors. The thinking until recently has been that the upcoming Anthropic and OpenAI IPOs will lift all AI boats. And that includes AI cryptocurrencies such as Venice Token.

According to this way of thinking, even more money will flood into the AI crypto space after the IPOs, helping to push up the price of Venice Token. That means crypto investors might be able to squeeze another year of triple- or even quadruple-digit returns out of Venice.

One-hit crypto wonders

But I don't think so. The AI crypto space is littered with big names that soar in value for one year before ultimately collapsing. Several prominent early AI crypto names have already fallen by the wayside. Even AI cryptos specifically pegged to the AI agent investment thesis have already imploded.

So what makes investors think Venice Token will be any different? It's still too early to pick winners and losers in the AI space. That makes it problematic to pick cryptocurrencies you can buy and hold for the long haul. Venice makes for an interesting short-term momentum play, but is simply too risky and volatile as a long-term wealth creation tool.

Dominic Basulto has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Bittensor, Ethereum, NEAR Protocol, and Venice Token. The Motley Fool has a disclosure policy.