April 2026 is shaping up to be another pivotal month for TAO.
On April 22, Grayscale officially submitted an application to the U.S. SEC for a TAO spot ETF, aiming to convert its Grayscale Bittensor Trust into an exchange-listed ETF. If approved, this would be among the first spot ETFs focused on decentralized AI network tokens, opening a compliant gateway for traditional investors. The filing documents show Coinbase will serve as the lead broker, with custodians including Coinbase Custody and BitGo. The SEC's review window is expected to land around August 2026, and the market is pinning high hopes on this.
Yet this positive news contrasts starkly with TAO's recent price trajectory.
Just weeks ago, the Bittensor ecosystem was hit by a severe earthquake. On April 9, major subnet developer Covenant AI announced its withdrawal from the Bittensor network. Founder Sam Dare publicly accused Bittensor co-founder Jacob Steeves of wielding centralized control over the network, pointing directly to the project's decentralized promise as "a lie." Even more unsettling for the market was Covenant AI's founder subsequently flooding the market with approximately 37,000 TAO, instantly igniting a liquidation wave. TAO prices plunged nearly 25% from around $330, once touching a low of $235.
This storm not only vaporized nearly $900 million in TAO market value but also tore open a deep fissure in Bittensor's governance structure. Current TAO prices are hovering near $249, with market value around $2.7 billion, down about 68% from its $767 historical high. Technically, analysts have anchored $235 as critical support. If it can hold and break through $264 resistance, a new rebound could begin.
However, the other side of the coin merits equal attention.
Despite suffering a severe confidence crisis, on-chain data shows about 70% of TAO tokens remained staked during the storm, with core network participants not collectively departing. Grayscale even boosted TAO's weight in its AI fund significantly to 43.06% on April 7, marking the product's largest single asset allocation record in history. Simultaneously, BitGo partnered with Yuma Group to extend institutional-grade custody services down to subnet (dTAO) token layers, further lowering the threshold for institutional capital entering the ecosystem.
Technological progress at the level is equally undeniable. Bittensor's core upgrade dTAO officially went live in February, with each subnet token tradable on DEXs like taosats. This upgrade is regarded as Bittensor's most significant technological iteration since its inception, shifting issuance distribution rights from a handful of validators to pure market forces. At the ecosystem level, subnet collaboration is accelerating: Score (SN44) and DSperse (SN2) are joining forces to advance verifiable reasoning into real visual AI application scenarios; OroAgent has also launched the largest open-source AI proxy competition to date on Bittensor.
From a broader macro perspective, the entire AI x Crypto track sector is continuing to heat up. In 2026, the total market value of the AI crypto sector has climbed to $21 billion, with Grayscale Q1 reporting AI as the most resilient crypto track. NVIDIA CEO Jensen Huang and renowned investor Chamath Palihapitiya have also been named on the All-In podcast, referencing Bittensor's Covenant-72B model—a decentralized large language model with 72 billion parameters, collaboratively trained by over 70 independent contributors—as a key milestone in distributed AI training.
The governance storm's pain is real, but the direction Bittensor represents—using blockchain incentives to aggregate global idle computing power and forge an open decentralized AI marketplace—is equally real. Grayscale's filing of an ETF application precisely illustrates how mainstream financial institutions are not retreating from long-term bets on this narrative due to short-term controversies.
The SEC's approval outcome, dTAO mechanism's actual operational effect, and whether the community can genuinely repair governance trust fissures are all core variables for TAO's future trajectory. For investors focused on the intersection of AI and crypto integration, TAO's turbulent period may precisely be the window to re-examine its long-term value.
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The above content is for reference only and does not constitute any investment advice. Crypto markets are volatile; please conduct your own research and make prudent decisions.#TAO #Bittensor #GrayscaleETF #AICrypto #DeAI #CryptoNews #AltcoinAnalysis