The Best-Performing Cryptocurrency of 2024 (Hint: It Wasn't Bitcoin)

For much of the past decade, Bitcoin (CRYPTO: BTC) has been the top-performing asset in the world. And 2024 was more of the same. Bitcoin was up 125% for the year, which trounced the performance of the Nasdaq (up 30%), gold (up 27%), and the S&P 500 (up 24%).

However, Bitcoin was not the best-performing cryptocurrency of 2024. That honor went to Virtuals Protocol (CRYPTO: VIRTUAL), which was up an astonishing 23,000% last year. Based on the strength of that performance, Virtuals Protocol ended 2024 as the 33rd-largest cryptocurrency in the world, with a nearly $4 billion market cap. So is it time to start thinking about adding Virtuals Protocol to your portfolio in 2025?

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The intersection of AI and crypto

To understand why Virtuals Protocol skyrocketed in value last year, all you have to know is that this cryptocurrency token is at the center of two important technological innovations: blockchain technology and artificial intelligence (AI).

That's because Virtuals Protocol is a blockchain platform for launching AI agents. Using Virtuals Protocol, it is now possible to create a highly specialized AI agent that carries out specific tasks for you while you sleep. These AI agents function autonomously, so you do not have to constantly prompt them to take next steps.

Image source: Getty Images.

Many of the most popular AI agents are related to gaming and entertainment, but a growing number of them are now finding uses for productivity. For example, instead of spending hours poring over data, charts, and online sentiment trends for specific cryptocurrencies, you could simply "hire" an AI agent to do all the heavy lifting for you.

There are several different ways to think about the intersection of AI and blockchain. You could invest directly in Virtuals Protocol, with the expectation that it will continue to be the most popular platform for creating AI agents. You could invest in any of the thousands of new AI agents that have already been created using this platform, with the expectation of participating in their future earning potential. Or, you could invest in any of the new meme coins that are being created, launched, and promoted by these AI agents.

The size and scope of the Virtuals Protocol ecosystem

Just as Bitcoin has its own blockchain ecosystem, so does Virtuals Protocol. According to CoinGecko, the total value of this ecosystem is now about $3.75 billion. That includes a $2.6 billion market cap for Virtuals Protocol and a $367 million market cap for the most popular AI agent (called aixbt), which helps to find potential new cryptocurrency investments.

Heading into 2025, the expectation was that the size and scope of this ecosystem would continue to grow, based on all the buzz and hype that currently surrounds the AI agent narrative. Right now, six different AI agents within the Virtuals Protocol ecosystem have market caps north of $35 million, enough to rank among the top 1,000 cryptocurrencies in the world.

Can Virtuals Protocol outperform Bitcoin in 2025?

Crypto investors have seen this story before: An altcoin emerges out of seemingly nowhere, trounces Bitcoin for a short period of time, and then is never heard of again. Usually, this is the case for hot new meme coins. But it has also been the case when it comes to brand-new technologies. Anyone remember all the excitement surrounding the metaverse during the last crypto bull market rally? But when was the last time anyone invested in a metaverse token?

That's not to say the same phenomenon will occur with AI agent tokens such as Virtuals Protocol. But troubling signs are already on the horizon. After hitting an all-time high of $5.02 on Jan. 2, Virtuals Protocol has plunged in price, and now trades at about $2.60. That's almost a 50% reversal within a short period of time.

That's why, from my perspective, Bitcoin is still the superior investment in 2025. Bitcoin has already shown its long-run staying power, and continues to be the No. 1 cryptocurrency in the world for both retail and institutional investors, with a market cap close to $2 trillion. If you are looking for a cryptocurrency that offers the potential for triple-digit returns on a recurring basis, it's still Bitcoin.

Should you invest $1,000 in VIRTUAL right now?

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Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.