Grayscale analysts believe Bittensor’s upcoming halving on December 14, 2025, may become a defining catalyst for TAO’s next major price expansion.
The event will cut daily token issuance from 7,200 to 3,600 TAO, reducing new supply by 50% and advancing the network’s scarcity model in a way that closely mirrors Bitcoin’s long-established halving cycle.
With TAO’s supply permanently capped at 21 million, the research team argues that this supply shock arrives at a time of growing institutional demand and accelerating subnet development, creating conditions that may support higher valuations.
Why the Halving Matters for TAO’s Market Structure
The halving sharply reduces TAO’s inflation rate from roughly 25.6% to 12.8%, marking the most significant issuance adjustment in the network’s history. Grayscale analysts, including Will Ogden Moore, emphasize that halving events in other capped-supply assets have often preceded strong upside momentum, especially when demand remains steady or increases.
They frame the December reduction as a key milestone in Bittensor’s long-term maturation, one that could reshape how investors evaluate the project’s monetary dynamics.
Grayscale notes that scarcity alone is not a guarantee of rising prices, but in markets where new issuance meaningfully declines and capital flows remain consistent, prior examples suggest a favorable environment for appreciation. This is particularly relevant for TAO as interest in AI-aligned crypto networks continues to accelerate globally.
Institutional Demand Adds Momentum Ahead of the Supply Shock
Beyond the supply-side narrative, Grayscale identifies institutional involvement as an increasingly important driver of confidence. Multiple publicly listed companies have already accumulated sizable TAO holdings as part of their long-term treasury strategies. Meanwhile, Grayscale’s own TAO ETP, approved in October 2025, will soon give traditional investors regulated and exchange-listed access to the asset. Analysts argue that this new investment channel could deepen liquidity at a critical moment, increasing the probability that reduced issuance leads to meaningful market impact.
Subnet Expansion Points Toward Stronger Network Fundamentals
Bittensor’s architecture is built around a network of specialized AI subnets, and more than 100 of these are currently running live. Grayscale highlights this ecosystem growth as a key factor in TAO’s investment story. Several early subnets have already demonstrated strong performance and real-world utility, reinforcing the idea that the network’s underlying value is not purely speculative but increasingly tied to functional, AI-driven applications.
The analysts describe this expanding subnet activity as a signal of genuine adoption, which, when paired with the halving’s reduced issuance, forms a dual narrative of strengthening fundamentals and tightening supply.
A Major Moment Approaches for TAO’s Market Outlook
With the halving now days away, Grayscale believes the combination of structurally lower inflation, broader institutional access, and rising demand across Bittensor’s ecosystem creates a compelling setup for the months ahead. The event is being positioned as a turning point for TAO, and the research team suggests that if network usage continues to scale alongside increasing scarcity, the asset could enter a new phase of price discovery going into 2026.