Grayscale: Bittensor's halving event next week is expected to push up TAO prices.

According to a report by Grayscale research analyst Will Ogden Moore, Bittensor, a decentralized, AI-focused network, will undergo its first halving event on December 14th, marking the end of its first four-year cycle. This pivotal event will halve the daily supply of its native token, TAO, from 7,200 to 3,600.

Bittensor, an open network combining AI and cryptography, allows users to freely contribute intelligence to improve AI systems. The network comprises multiple subnets, each focusing on a specific AI task and allocating TAO (Trusted Amounts) as incentives based on the utility of user input. Currently, there are 129 active subnets, providing a variety of AI-driven services including computation, data storage, AI agents, and deepfake detection.

Moore points out that Bittensor's halving event aims to increase the scarcity of TAO by reducing the amount of tokens issued to network participants. He states, "Bitcoin's history shows that while rewards decrease, supply reduction can enhance network value, as its network security and market value have been strengthened through four consecutive halvings. Similarly, Bittensor's first halving marks a key milestone in the network's maturation process, propelling it toward its supply cap of 21 million tokens."

Moore stated that Bittensor is currently experiencing strong user adoption and rising institutional interest. He mentioned that the launch of Dynamic TAO (dTAO) in February was a major achievement for Bittensor. This mechanism allows direct investment in subnets, leading to a dramatic increase in the total market capitalization of these subnets. Since the launch of dTAO, institutional investors such as Yuma Asset Management and Stillcore Capital have launched funds investing in Bittensor's leading subnets. In addition, three publicly traded companies have established dedicated TAO treasuries. Among them, the leading company, TAO Synergies, currently holds approximately $12 million worth of the tokens.

Moore wrote in the report: "The early success of certain subnet applications and the increase in institutional capital in the Bittensor ecosystem, combined with the upcoming TAO supply halving, could be a positive catalyst for price increases in our view."

According to The Block's cryptocurrency price page, TAO rose 0.5% in the past 24 hours, trading at $282.31, and fell 28.4% in the past month. (The Block)

Previous news: Bittensor will undergo its first halving on December 14th, reducing the daily supply of TAO to 3600.