Grayscale Report: Bittensor Experiences Its First "Halving," AI Computing Power TAO Approaches Bitcoin Digital Gold Moment

Bittensor Set for First Halving: Mining Rewards Slashed, 81% Token Lockup Tightens Supply and Demand, Attracting Intense Institutional Interest

(Background: Bittensor ecosystem company xTAO listed on Canadian Securities Exchange as “XTAO.U”, backed by DCG and Animoca Brands, riding the decentralized AI wave) (Additional Info: In-depth explanation of Bittensor’s new economic model “Dynamic TAO”)

Decentralized AI network Bittensor (TAO) announced it will launch its first “halving” as early as December 14, cutting daily new issuance from 7,200 to 3,600 tokens. As the Trump administration eases crypto regulations and Wall Street and Silicon Valley hunt for the next high-growth sector, Grayscale’s report even calls this supply cliff an “AI version of the Bitcoin moment.”

Halving Mechanism: The 21 Million Token Milestone Bittensor’s halving isn’t set on a calendar; it’s coded in the protocol. When total supply hits 10.5 million (half the cap), block rewards will automatically be cut in half, marking the start of a long-term deflationary cycle. Grayscale Research analyst William Ogden Moore describes this moment: “This is a milestone for network maturity, just like Bitcoin’s critical point confirming the 21 million hard cap.” More importantly, official data shows up to 81% of TAO is staked, meaning a tiny circulating supply. Once daily issuance drops 50% overnight, available market supply will tighten further. Such supply shocks often precede asset repricing, leading some to bet TAO could replicate Bitcoin’s early scarcity narrative.

129 Subnets: Incubator for Decentralized AI If Bitcoin is digital gold, Bittensor is like “Y Combinator for decentralized AI.” In just a year, subnets have surged from over 50 to about 129, with a combined market cap nearing $3 billion. Each subnet operates like an independent startup: Chutes focuses on serverless computing, Ridges on AI agent development. As halving squeezes the reward pool, subnet competition will intensify, phasing out ineffective models and shifting token incentives from speculation to real utility.

Institutional Capital: From Waiting to Entering Amid a pro-crypto policy environment under the Trump administration, institutions are moving faster. Polychain Capital and DCG have already deployed over $350 million into TAO, while the public company Oblong has joined with a strategic investment. Meanwhile, Europe’s TAO ETP and Grayscale’s trust product provide compliant access, with early interest rising from banks, insurers, and family offices. Market participants expect potential passive buying to gradually emerge after the halving.

Global large AI models now exceed 10 trillion parameters, making compute power the “oil” of the new era; scarce TAO supply is being likened to gold. Halving reduces token “inflation” and validates the tokenization of machine learning outside the lab. For investors, Bittensor offers a long-term bet on “compute as currency.” As supply dilution halves after December 14, the market will judge with real capital: can decentralized AI, like Bitcoin, combine scarcity and utility?

The halving block height is still approaching, but the psychological countdown is already affecting the market. Regardless of price volatility, two things are now clear: AI compute is becoming a tradable, allocatable asset, and Bittensor is defining its narrative with a Bitcoin-style scarcity mechanism. As the supply gate tightens, the next chapter of decentralized AI may unfold post-halving.

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