Why Bittensor (TAO) Keeps Pumping

Bittensor (TAO) has captured the attention of investors, and it's easy to understand why. The narrative surrounding AI is both simple and powerful, and in this current crypto cycle, few categories are hotter than AI x Crypto. As one of the most prominent projects in this space, Bittensor is positioning itself as the project to watch.

At its core, Bittensor is pushing a new frontier: creating a decentralized network where AI models can be trained and shared in a way that aligns incentives for both developers and users.

This combination of a clear narrative with real technological substance has captured the market's imagination. But there’s more to this story than mere hype. Behind the recent price surge are meaningful developments within the TAO ecosystem itself, along with broader enthusiasm for AI.

In this article, we will explore what is happening in the Bittensor ecosystem and examine the upcoming catalysts that could drive its momentum.

The Expansion of Subnets

A major catalyst behind Bittensor's growth is the rapid expansion of subnets. Introduced just a year ago, subnets have quickly become the backbone of Bittensor’s development. Today, Bittensor boasts over 50 active subnets on mainnet, with many others on testnets, which are poised to go live in the near future. This surge in subnets has accelerated the network’s capabilities, attracting more developers, users, and attention.

The Opentensor team (primary contributors to the Bittensor ecosystem), understanding the importance of this, has steadily increased the subnet limit over time — from 32 initially to 45 and now to 52. This gradual raising of the cap reflects both the growing capacity of the network and the increasing appetite for more subnets to go live.

As the subnet limit is progressively expanded — and eventually removed altogether — the potential for exponential growth within the Bittensor ecosystem becomes clear. More subnets mean more AI models, more collaboration, and more growth for the ecosystem.

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Dynamic TAO: Turning Bittensor into a Playground for Investors

One of the most anticipated upgrades in Bittensor’s history is Dynamic TAO or dTAO. Now live on the RAONET testnet, dTAO is set to introduce a dynamic market for subnets.

With dTAO, each subnet will soon have its own token, allowing its value to be determined by market forces. This fundamentally changes how subnets operate and how participants engage with the network. Subnet tokens will create a competitive landscape where the most efficient and valuable subnets thrive, while less effective ones fade out.

Moreover, this introduces a new speculative dynamic to the Bittensor ecosystem. TAO holders will now bet on individual subnets as well as the network as a whole. For investors, this opens new opportunities – they will be able to sift through subnets, analyzing their performance, utility, and long-term potential. Just as crypto traders scour Coinmarketcap to find undervalued gems, dTAO will create a similar dynamic within the Bittensor ecosystem. 

Crucially, all this activity increases demand for TAO itself. Since TAO is required to acquire any subnet token, the introduction of dTAO could further fuel its demand, making Bittensor even more attractive to investors.

TAO’s Halving in 2025

Bittensor is approaching its first halving event, slated for late 2025. Much like Bitcoin’s halving cycles, this event will cut the rate at which new TAO tokens are emitted by half.

Currently, the Bittensor network emits 1 TAO as block rewards (7,200 TAO daily) which are distributed among miners, validators, subnet owners, and delegators. However, when the halving occurs (triggered when 10.5 million TAO are in circulation), this emission will be halved to 0.5 TAO per block, reducing the daily supply of new TAO entering the market.

Why does this matter? When the supply of TAO is cut, it introduces scarcity. In any market, reduced supply with steady or rising demand (thanks to increasing subnets and introduction of dTAO) can only lead in one direction: upward.

What makes this event particularly bullish is the psychology behind halving cycles. Investors often anticipate these events months in advance, leading to speculative buying as market participants position themselves for the impending supply shock. Bitcoin's halving events have consistently sparked price surges, and TAO’s first halving could generate similar excitement within the Bittensor community and beyond.

Bittensor’s Unmatched Mindshare

Bittensor continues to capture the attention of the crypto and AI communities. From packed side events at Token2049 in Singapore to buzz-worthy presentations at Google, it’s evident that Bittensor maintains constant mindshare in the space.

The project’s cult-like following on Twitter keeps the conversation alive, pushing τ far and wide. Asset managers like Grayscale and Arca have publicly shared their bullish outlook, further legitimizing Bittensor in the eyes of institutional investors. 

Now let’s take a look at the macro level things happening in the world of AI that are considered positive for AI x crypto projects like Bittensor.

Issues with OpenAI

OpenAI is at a crossroads. Recently, news broke that OpenAI is transitioning from a non-profit control to a for-profit benefit corporation. Following this restructuring, the company’s valuation has soared to over $150 billion and they’ve raised $6.6 billion in fresh funding.

Additionally, there’s been recent departures of key executives, including Chief Technology Officer Mira Murati and two other senior executives, raising concerns about potential internal issues.

This shift raises red flags for the AI safety community, prompting many to question whether OpenAI can genuinely commit to responsible AI development when profits are at the forefront.

In this landscape, the case for open-source, decentralized platforms like Bittensor becomes crystal clear. While OpenAI charts a corporate course, Bittensor represents a vision for a more equitable AI future, one that thrives on a community-driven effort.

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Regulatory Uncertainty around Centralized AI

Centralized AI is running into walls everywhere. As governments scramble to regulate, they're imposing restrictions that could stifle innovation. In various jurisdictions, AI is already being censored. Europe is rolling out the AI Act, which enforces compliance with strict standards, while China has set rules to align AI with state policy. In the U.S., regulators are circling, with calls for more oversight and control; however, in a recent event, California Governor Gavin Newsom vetoed a major AI safety bill that would have imposed strict regulations on AI models. Many view this veto positively, as it avoids heavy regulations that could hinder innovation and drive AI companies out of California.

Nonetheless, there is a broad regulatory squeeze on AI from various jurisdictions worldwide. The fact that centralized AI is subject to regulatory control highlights a fundamental flaw: it's too easy to control. 

When a few large companies hold the keys to centralized AI, they become prime targets for government pressure and censorship. This is where decentralized AI platforms, like Bittensor, have the advantage. They cannot be shut down or censored by any single entity, as no one entity controls it.

Closing Thoughts

There’s a lot going right for Bittensor, and the rising token price is just the cherry on top. With existing momentum, the upcoming updates mentioned above, potential EVM support, and ongoing community development – such as the rapid integration of NousResearch’s breakthrough in distributed training into Bittensor – these are all strong indicators of Bittensor’s promise.

In a world where centralized AI is increasingly regulated, censored, and driven by profit motives, Bittensor offers a compelling alternative: a decentralized, community-driven approach that thrives on collaboration, innovation, and shared incentives. And that’s why it’s worth keeping an eye on.