The Bittensor network approaches its first supply halving around Dec. 14, an event that will cut daily token issuance from 7,200 to 3,600 TAO. The milestone comes as the decentralized AI protocol nears 10.5 million tokens in circulation, triggering a programmatic emission reduction similar to Bitcoin's four-year cycles. Analysts remain divided on the price impact, with some citing long-term scarcity benefits while others warn of a potential "sell the news" event.
What Happened: First Halving Approaches
Bittensor will reach its halving threshold when circulating supply hits 10.5 million TAO, according to data from Taostats. The protocol operates on a fixed 21 million token cap designed to mirror Bitcoin's scarcity model.
Current circulating supply stands at 10,451,753 TAO. Unlike Bitcoin's time-based schedule, Bittensor's halving activates based on supply milestones rather than predetermined dates.
The emission reduction will affect rewards distributed to miners, validators and subnet owners across the network.
Grayscale Research Analyst Will Ogden Moore noted the structural shift mirrors Bitcoin's progression through four halvings, during which network value strengthened despite declining miner rewards.
"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 said.
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Why It Matters: Scarcity Versus Sentiment
Supply halvings typically reduce token issuance velocity, creating tighter market conditions that can drive price appreciation. Historical patterns across Bitcoin Cash and Litecoin show markets often rally ahead of emission cuts, though outcomes vary based on broader market conditions and trader positioning.
Market sentiment around TAO remains cautious despite the approaching milestone. One analyst said the halving represents a significant protocol development but questioned its near-term price impact.
"I am not expecting TAO to move on the halving event. Over time, increased scarcity will matter.. as it has for Bitcoin every four years But.. I don't see it being an important catalyst to price in the short term That said.. it is a major moment in the Bittensor journey," the analyst wrote.
A trader flagged technical weakness ahead of the event, noting TAO broke below key support and faced rejection on attempted recovery.
"I warned of a potential sell the news event, and it is looking more likely that is the case….The 3 day zone I highlighted has been lost, and we have just seen an aggressive rejection on the reclaim attempt. If $300 now continues as resistance I think this very likely retraces to $230, and I would not be surprised to see it below $200 either," the trader said.
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