TAO Surges as Grayscale Files First US Bittensor ETF

• Grayscale filed for first US spot ETF tracking Bittensor's TAO token.
• Proposed GTAO ETF would hold TAO directly on NYSE Arca.
• Filing follows TAO's recent halving event reducing token emissions.
• Bittensor network hosts 128+ AI subnets with $3B valuation.

Grayscale Investments has filed for the first US exchange-traded product targeting Bittensor's decentralized AI ecosystem. The asset manager submitted an S-1 registration on December 30, 2025, seeking SEC approval to convert its existing Bittensor Trust into a spot ETF. Proposed to trade under ticker GTAO, this would provide regulated exposure to TAO tokens through traditional brokerage accounts. This marks a significant institutional endorsement of AI-focused crypto assets.

What Does Grayscale's Bittensor ETF Proposal Include?

The filing outlines a passive investment vehicle holding TAO tokens directly with BitGo Trust as custodian. GTAO would list on NYSE Arca with shares created/redeemed in 10,000-unit blocks. Grayscale aims to transition the trust into an SEC-reporting company, enhancing transparency measures. Coinbase would serve as prime broker while BNY Mellon handles transfer agency. This structure mirrors Grayscale's previous crypto ETP launches but targets decentralized AI infrastructure.

Why Is Institutional Demand Growing for TAO?

Bittensor's network rewards participants with TAO for contributing machine-learning resources. Its 21 million capped supply and 128+ AI subnets appeal to institutional portfolios seeking AI exposure. Recent tokenomics changes increased scarcity, with December's halving cutting emissions from 26% to 13% annually. The network has expanded to 128-129 specialized subnets despite TAO's 52% YTD price decline. Traditional finance integration through custodians like Coinbase has reduced operational barriers.

What Are the Potential Market Implications of GTAO?

Approval could unlock significant institutional capital for decentralized AI projects. GTAO would enable mainstream investors to access TAO without direct crypto custody. However, the ETP wouldn't permit staking or network participation, creating pure price exposure. Liquidity could improve for TAO, which currently averages $72 million daily volume. The filing aligns with Grayscale's 2026 outlook predicting crypto ETP growth amid regulatory clarity. Success might mirror Bitcoin ETF trajectories but faces unique SEC scrutiny around AI token models.