Bittensor’s halving may support TAO – Grayscale analyst

Bittensor will hold its first halving on Dec. 14, cutting daily issuance of its TAO token to 3,600 from 7,200. Grayscale views the smaller supply, along with growing network use, as factors that could support the token’s price.

The event closes Bittensor’s initial four-year cycle and reduces the amount of TAO distributed to network participants each day. Bittensor is a decentralized AI network where users contribute models or data to specialized “subnets” and earn TAO based on measured utility.

The network now has 129 active subnets that provide services such as compute, data storage, AI agents, and deepfake detection. The cut in emissions is intended to increase scarcity as Bittensor advances toward a 21 million-token cap.

Grayscale Research analyst Will Ogden Moore drew a comparison: “Bitcoin’s history shows that reduced supply can enhance network value despite smaller rewards, as its network security and market value have strengthened through four successive halvings.” He added: “Similarly, Bittensor’s first halving marks a key milestone in the network’s maturation as it progresses toward its 21 million token supply cap.” Moore pointed to strong user traction and rising interest from professional investors.

Moore highlighted the February launch of dynamic TAO (dTAO), which made individual subnets investable and coincided with a sharp increase in their combined market capitalization. Since then, asset managers including Yuma Asset Management and Stillcore Capital have introduced funds focused on leading Bittensor subnets.

“The early success of certain subnet-based applications and an increase in institutional capital in the Bittensor ecosystem, combined with the forthcoming TAO supply halving, could be a positive catalyst for price, in our view,” Moore wrote.

As we reported earlier, Grayscale questioned the strict four-year Bitcoin halving cycle, noting today’s market structure is different and that BTC could reach new highs in 2026 despite the recent correction. The firm said there was no prior parabolic rally, recent 25–30% pullbacks are common. 

Grayscale also highlighted growing demand from ETFs and corporate treasuries, plus potential U.S. rate cuts and regulatory progress, and expects investors to focus less on calendars and more on capital flows, institutional adoption, and macro trends.