What Happened?

On December 5, 2025, Grayscale Research posted a tweet about Bittensor’s token, $TAO, and its first “halving” event. They wrote that lower TAO supply growth plus higher demand could act as a positive catalyst for the whole Bittensor ecosystem, and linked to a new research report called “Bittensor on the Eve of the First Halving.”

This update is important because Grayscale is one of the biggest names in digital asset investing.

When they comment on a project, people pay attention.

In a follow-up tweet, they promoted the Grayscale Bittensor Trust, a product that lets accredited investors get TAO exposure without holding the token directly.

What is The TAO Halving?

Right now, Bittensor produces about 7,200 TAO every day. After the halving, it will produce 3,600 TAO per day.

So,

• The supply coming into the market gets cut in half
• TAO becomes harder to obtain
• Scarcity increases over time
  

This halving works exactly like Bitcoin’s. It slows down new supply and often leads to stronger long-term value.

Why Graysacle Thinks This Matters

Grayscale wrote a 10-page report explaining why they’re optimistic. Here’s a breakdown of their view:

1. Less TAO in the market. With emissions dropping, fewer new tokens will circulate.
2. More demand for Bittensor’s AI network. Bittensor now has over 100 active subnets doing real AI work, including:

• Chutes for fast AI inference
• Ridges for coding agents
• Other subnets powering training, storage, and reasoning

As more people use these tools, demand for TAO rises.

3. These two forces working together. Less supply + more demand could mean stronger market conditions for the ecosystem.

That is Grayscale’s entire point.

They also note that Bittensor has a fixed cap of 21 million TAO, like Bitcoin, and that more TAO is getting locked in staking and in subnets instead of sitting idle on exchanges.

What This Means For You

Depending on who you are, here’s how to think about this:

• If you’re thinking about investing, this could be an opportunity, but it’s genuinely risky. Do more research before putting money in. Start with amounts you can afford to lose. Grayscale’s backing adds credibility, but doesn’t eliminate risk. 
• If you build AI tools, Bittensor’s growing ecosystem might offer opportunities to create products on decentralized infrastructure and earn TAO for contributions.
• If you work in AI, this is a challenge to traditional AI development. If it works, it could change how AI gets built, from corporate labs to global, open networks.
• And if you’re just curious about tech, TAO is becoming a major player in “AI meets crypto.” It’s worth watching to see if decentralized AI can actually compete with Google and OpenAI.

The Bottom Line

Grayscale thinks Bittensor’s first halving is a big deal. Cutting supply while demand grows creates good conditions for prices to rise. Major investors are taking this seriously.

But the truth is, nobody knows for sure what will happen. Crypto markets are crazy and unpredictable. AI adoption could slow down. Other projects could do it better. New regulations could create problems. Technical issues could emerge.

Whether Bittensor survives and thrives will become clearer after December 14. For now, everyone’s watching the countdown.

Read Grayscale’s full report at: research.grayscale.com/reports/bittensor-on-the-eve-of-the-first-halving

Learn about their investment product at: grayscale.com/funds/grayscale-bittensor-trust

Follow updates: @Grayscale, @opentensor