The price scenario following a halving event in crypto assets that use the proof of work (PoW) mechanism, such as TAO (in its subnet rewards) and Bitcoin, is rarely an instant increase. Instead, history points to a dynamic of Implosion followed by an Explosion.
Phase 1: The Implosion (1 to 3 weeks post-Halving)
This is the phase of "market cleaning" and can occur immediately after December 12.
Miner/Validator Capitulation: The block reward (issuance) will be reduced by 50%. Less efficient TAO miners and validators or those with tight profit margins may be forced to shut down or sell their remaining reserves (capitulate) to cover operational costs.
Price Impact: This may create a final selling pressure in the short term, manifesting as a price drop or sideways movement.
"Privileged" Signal: Whales (who already purchased in the range of $280-$310) will see this as a final opportunity to accumulate on the dip. If the price drops, but the on-chain buying volume from large wallets increases, it is the confirmation of the bottom.
The "Sell the News": Part of the market, which buys only in anticipation of the event (and not by supply logic), may take profits immediately after the Halving is executed, realizing that the appreciation was not instantaneous.
Phase 2: The Explosion (2 to 6 months post-Halving)
This is the phase driven by programmed scarcity and the most likely scenario according to historical halving data (like those of Bitcoin).
Real Supply Shock: After the initial capitulation, the main engine comes into play. The daily flow of new TAOs in the market is halved. This does not affect demand but drastically reduces the constant selling pressure.
Effect: Even if the demand for TAO remains stable, the reduction in supply makes the currency scarcer. With institutional demand coming from the AI sector, much less buying volume is needed for the price to rise significantly.
Post-Halving Narrative: The Halving positions the TAO as an anti-inflationary and programmed scarcity asset within the AI sector.
Price Impact: Historically, the largest price increases after a halving occur 6 to 12 months after the event (the so-called "Extended Rally"). For the TAO, this suggests that the price peak may occur in Q2 or Q3 of 2026.
Post-Halving Sector Rotation: As anticipated in the previous analysis, the success of the TAO post-Halving may serve as the catalyst for the entire AI sector. The profits generated by whales in TAO are highly likely to be reallocated to secondary line AI assets (like FET and RENDER), uplifting the entire ecosystem.
