The decentralized artificial intelligence network Bittensor is expected to experience its first halving event on December 14, marking the official end of its first four-year operational cycle. This critical event will reduce the daily issuance of its native token TAO from 7200 to 3600, and Grayscale analysts believe this will lead to an increase in the token's price.
Bittensor is a decentralized open network where anyone can create, train, and use AI. Projects built on this network are called subnets, and each subnet is a market focused on specific AI/ML services (such as text generation, translation, data storage, and AI agents). Currently, there are 129 active subnets on Bittensor, and miners contribute computational power to these subnets, while validators assess the quality of contributions and distribute TAO rewards.
Grayscale Research analyst Will Ogden Moore believes that the reduction in supply after the halving will decrease the number of newly issued tokens allocated to network participants, while increasing the scarcity of TAO. He stated: "Bitcoin's history shows that even with a reduction in block rewards, the decreased supply can still enhance network value, as its network security and market capitalization have continued to strengthen after four halvings. Similarly, Bittensor's first halving marks an important maturation milestone in the network's journey towards a cap of 21 million tokens."
The supply of TAO adopts a halving cycle every four years, with a final total limit of 21 million tokens (Source: Grayscale Research)
Moore noted that Bittensor is currently experiencing significant adoption growth momentum and rising institutional interest. The dTAO (dynamic TAO) mechanism launched in February is a key milestone that has made subnets investable for the first time, directly driving rapid expansion of subnet market capitalization.
Since the launch of dTAO, institutional investors such as Yuma Asset Management and Stillcore Capital have successively launched investment funds focusing on Bittensor's top subnets. In addition, three publicly listed companies have established dedicated TAO treasury positions, with TAO Synergies being the largest, currently holding approximately $12 million worth of TAO tokens.
Moore wrote:
"In our view, some subnet-based applications have already shown initial success, coupled with the increasing institutional capital investment in the Bittensor ecosystem and the upcoming TAO supply halving, all of which could serve as positive catalysts for price appreciation."
According to CoinGecko data, TAO has risen about 4% in the past 24 hours but has dropped 22.2% in the past 30 days. As of the time before this article was published, the trading price of TAO was $296.5.
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