Bitensor (TAO) is approaching its first halving. The decentralized AI network is looking at a supply of 10,500,000 TAO as the halving approaches. This event is scheduled around December 14, and the daily token issuance will be halved.
This halving period is an important moment for Bitensor, reflecting the Bitcoin (BTC) issuance reduction model. Experts expect this event to trigger a positive price reaction, but some warn of a 'news sell' event.
Bitensor Halving Mechanism and Supply Dynamics
Bitensor has a fixed supply cap of 21 million TAO. It is designed to create scarcity similar to Bitcoin. According to the latest data, Bitensor's circulating supply has reached 10,451,753 TAO, approaching the halving threshold.
This event reduces the daily issuance from 7,200 TAO to 3,600 TAO. This affects rewards for miners, validators, and subnet owners. Unlike Bitcoin's time-based schedule, Bitensor's halving is activated when the circulating supply reaches 10.5 million tokens.
Miner registration, changes in network activity, and the introduction of Alpha tokens can impact the timing, so the date is fluid. Additionally, the subnet Alpha tokens introduced in February 2025 will follow the same issuance schedule.
Why Halving is Important
Halvings are generally viewed as positive catalysts, as they slow the rate at which new tokens enter circulation. Historical examples include Bitcoin (BTC), Litecoin (LTC), and Bitcoin Cash (BCH). The market often reacts driven by demand dynamics and trader sentiment. The outcomes vary, but narratives around scarcity tend to shape sentiment ahead of issuance reductions.
Will Auden Moore, a research analyst at Grayscale, emphasized the long-term effects of these structural changes. He stated that the reduction in issuance naturally increases scarcity and can strengthen the network's value over time.
The analyst also mentioned that Bitcoin's market value and network security have consistently strengthened through four halving events. According to Moore, Bitensor's first halving is a comparable milestone that signals the protocol's progress towards a fixed cap of 21 million TAO.
“The early success of applications based on specific subnets and the increase in institutional capital for the Bitensor ecosystem, along with the upcoming TAO supply halving, can serve as positive catalysts for the price,” Moore added.
TAO Technical Outlook and Market Sentiment
Nevertheless, market sentiment towards TAO is cautious. One analyst emphasized that while the halving will increase TAO's long-term scarcity, the event itself is unlikely to trigger an immediate price increase.
“I do not expect TAO to fluctuate during the halving event. While increasing scarcity over time is important, as Bitcoin has done every four years… I do not see it being a significant catalyst for the price in the short term. Nevertheless, this is an important moment in the Bitensor journey,” the post read.
Another trader warned of the possibility of a “sell-the-news” event as the halving approaches. He pointed out that TAO has already fallen below key support zones and showed signs of weakening upward momentum, experiencing a sharp rejection during the recovery attempt.
“I warned of the possibility of a sell-the-news event, and it seems that possibility is gradually increasing…. The three-day zone I emphasized has disappeared, and we just saw a sharp rejection in the recovery attempt. If $300 continues to be resistance, I think there is a very high likelihood of returning to $230, and I wouldn't be surprised if it even drops below $200,” the analyst said.
Meanwhile, according to market data from BeInCrypto, TAO has fallen nearly 28% over the past month. However, it recorded a slight increase of 5.2% last week.
At the time of writing, this altcoin was trading at $288.33, having increased by 1.83% over the past day. It will become clear in the coming days whether the halving event will strengthen the overall bearish trend or improve market sentiment.
