TAO could soar after Bittensor halving next week: Grayscale

Source: PortaldoBitcoin Original Title: TAO could surge after Bittensor halving next week: Grayscale Original Link: The decentralized Bittensor network, a project focused on artificial intelligence, is preparing for a decisive moment: the first halving in its history, scheduled for December 14.

The reduction of the TAO token issuance by half, from 7,200 to 3,600 units per day, closes the inaugural four-year cycle of the protocol and could serve as an important trigger for appreciation, according to analysis by Grayscale.

The event replicates Bitcoin’s well-known logic, in which gradual supply cuts tend to strengthen scarcity dynamics and, historically, have helped drive the price of the world’s largest cryptocurrency higher across its four halvings.

Bittensor operates as an open network that rewards contributions of intelligence aimed at improving AI systems. Its ecosystem is structured in subnets and currently has 129 of them, dedicated to specific tasks such as computation, data storage, autonomous AI agents, and deepfake detection.

Users are compensated in TAO based on the utility level of their contributions, creating a competitive and constantly evolving technological marketplace. By reducing the daily issuance of the token, the halving promises to increase scarcity and, potentially, the perceived value of the asset among network participants.

The maturity of Bittensor

Will Ogden Moore, an analyst at Grayscale Research, states that the process marks an important step in the maturation of Bittensor. According to him, although the reduction in rewards may seem like a short-term challenge, networks based on similar mechanisms, like Bitcoin, show that market value and security can strengthen after such events.

“Bittensor’s first halving is an important milestone as the network moves toward its supply cap of 21 million tokens,” he said.

Moore also highlights the strong growth of the ecosystem in 2024, driven by the launch of dynamic TAO (dTAO) in February. The new mechanism made Bittensor’s subnets investable, allowing funds and companies to directly choose their favorite niches within the network.

Since then, managers such as Yuma Asset Management and Stillcore Capital have launched funds dedicated to the main subnets, while three publicly listed companies have created treasuries in TAO, led by TAO Synergies, which currently holds about $12 million in tokens.

For Grayscale, this set of factors—growing adoption, institutional capital entering the ecosystem, and the imminent supply reduction—creates a favorable scenario for TAO’s performance.

“The initial success of certain subnet-based applications and the increase of institutional capital in the Bittensor ecosystem, combined with the imminent halving of TAO’s supply, could be a positive catalyst for the price, in our opinion,” wrote Moore.