Crypto asset manager Velvet Capital has launched what it bills as the first fully autonomous, on-chain hedge fund, relying entirely on artificial-intelligence agents to handle trading, research and risk management. The strategy went live on 4 July and is marketed as a way to run portfolio operations without day-to-day human intervention. The fund is built on Virtuals’ newly introduced Agent Communication Protocol (ACP), a software layer designed to let blockchain-based AI agents communicate, settle transactions and share liquidity more efficiently. Virtuals says ACP reduces latency, security exposure and liquidity fragmentation by standardising how agents interact across decentralised networks. Velvet Capital’s move highlights the accelerating convergence of cryptocurrency infrastructure and generative AI tools as firms seek to automate investment workflows. Financial details of the new vehicle were not disclosed, and the company has yet to outline how the product will address regulatory oversight of algorithmic trading and custody.