Bittensor’s halving next week expected to boost TAO price, Grayscale says

The decentralized, AI-focused network Bittensor is set for its first halving event on Dec. 14, marking the end of its inaugural four-year cycle. This pivotal event will halve the daily issuance of its native TAO token from 7,200 to 3,600.

Bittensor operates as an open network at the intersection of AI and crypto, allowing users to freely contribute intelligence to improve AI systems. 

The network has subnets that are each dedicated to a specific AI task, and distributes TAO as incentives based on the utility of user input. There are currently 129 active subnets that offer a variety of AI-led services including compute, data storage, AI agents, and deepfake detection.

The network's halving is poised to increase the scarcity of TAO by reducing the token emissions distributed among network participants.

"Bitcoin's history shows that reduced supply can enhance network value despite smaller rewards, as its network security and market value have strengthened through four successive halvings," said Grayscale Research Analyst Will Ogden Moore. "Similarly, Bittensor's first halving marks a key milestone in the network's maturation as it progresses toward its 21 million token supply cap."

Moore said Bittensor is currently seeing strong adoption and rising institutional interest. The Grayscale analyst pointed to the February launch of dynamic TAO (dTAO) as a major achievement for Bittensor. This mechanism made subnets directly investible, leading to a sharp expansion in the total market capitalization of those subnets, Moore said.

Since the launch of dTAO, institutional investors such as Yuma Asset Management and Stillcore Capital, have launched funds investing in Bittensor's top subnets. Moreover, three public companies have established dedicated TAO treasuries. TAO Synergies, the leading firm, currently holds about $12 million worth of the token.

"The early success of certain subnet-based applications and an increase in institutional capital in the Bittensor ecosystem, combined with the forthcoming TAO supply halving, could be a positive catalyst for price, in our view," Moore wrote. 

According to The Block's crypto price page, TAO is up 0.5% in the past 24 hours to trade at $282.31. It is down 28.4% in the past month.

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