Bittensor Jumps 10% After Grayscale Officially Unveils TAO Trust

Bittensor’s TAO token rose nearly 10% on Tuesday, reaching $290, after Grayscale launched the Grayscale Bittensor Trust (GTAO) on OTC Markets. The trust allows investors to gain exposure to TAO through a traditional security without the need for direct custody of the token as detailed in reports. This development marks one of the first regulated investment vehicles for the decentralized AI network.

The rally followed a structural change in the Bittensor ecosystem: a halving event in mid-December that cut daily TAO emissions by 50% according to Coinotag. The reduction in supply inflation made the token’s model similar to Bitcoin’s, potentially enhancing its appeal to investors seeking scarce digital assets as Yahoo Finance reports. The move pushed TAO to its highest level in weeks, with 24-hour trading volume topping $230 million.

Grayscale announced the trust would trade under the ticker GTAO and aims to track TAO’s market price, minus fees and expenses according to LiveBitcoinNews. The trust reported a total expense ratio of 2.5% and a net asset value of $7.96 per share as of January 5 as Blockonomi details. This product aligns with Grayscale’s broader strategy to expand regulated crypto exposure beyond Bitcoin and Ethereum.

Why Did This Happen?

The halving event in mid-December marked a key structural shift in Bittensor’s supply dynamics. By reducing TAO emissions, the network introduced tighter scarcity, a feature that has historically driven interest in other crypto assets like Bitcoin as LookonChain notes. This move has drawn comparisons to Bitcoin’s halving events, which are often associated with long-term price appreciation due to reduced supply growth.

The timing of the trust’s launch aligns with growing institutional interest in AI-linked crypto assets. Investors are increasingly looking for exposure to blockchain-based infrastructure that supports decentralized innovation, particularly in high-growth areas like artificial intelligence according to Cointelegraph.

Grayscale has also filed paperwork with U.S. regulators to convert the Bittensor Trust into a spot ETF as reported by Investing.com. If approved, this would provide an additional layer of accessibility for retail and institutional investors. The filing is part of a broader push by Grayscale to expand its product offerings in the crypto space beyond Bitcoin and Ethereum.

How Did Markets React?

TAO’s price surged nearly 10% on January 6, trading above $290 for the first time in weeks according to Global Newswire. The rally brought the token’s 24-hour trading volume to over $230 million, a significant increase from its average daily volume as The Motley Fool reports. The response reflects strong investor sentiment toward the new investment vehicle and the underlying token’s fundamentals.

The Grayscale Bittensor Trust is now listed on OTC Markets, allowing investors to gain regulated exposure to TAO without directly holding the asset as Investing.com notes. The trust’s shares trade under the ticker GTAO and are priced at a premium or discount to net asset value. This structure allows for easier entry for institutional and retail investors who may be wary of handling digital assets directly.

What Are Analysts Watching Next?

Analysts are closely watching the SEC’s response to Grayscale’s filing to convert the trust into a spot ETF. If approved, the product would be the first U.S.-listed ETF for TAO, potentially bringing in a new wave of institutional capital as Nasdaq reports. The approval timeline, however, remains uncertain, and the trust’s performance will depend on regulatory decisions and broader market conditions.

Another key factor analysts are monitoring is the long-term adoption of Bittensor’s decentralized AI network. The platform has positioned itself as an open-source alternative to centralized AI infrastructure, incentivizing contributors through staking, governance, and utility rewards . If adoption grows, it could further support TAO’s price and market cap.

The broader crypto market will also influence TAO’s trajectory. While the token has surged recently, it is still down over 50% year-to-date. Investors will be looking for signs of sustained demand and fundamental improvements to justify higher prices .

In parallel, the European market has shown interest in Bittensor. Deutsche Digital Assets recently listed a Bittensor ETP on the SIX Swiss Exchange under the ticker STAO, highlighting global demand for regulated TAO exposure . This international expansion could further boost the token’s visibility and legitimacy.

Investors are also assessing how Grayscale’s move affects the broader crypto ETF landscape. The firm has been a pioneer in regulated digital asset products, and its success with Bitcoin and Ethereum ETFs has set a precedent for future offerings . If the Bittensor ETF gains traction, it could encourage other firms to launch similar products, intensifying competition in the space.

Overall, the launch of the Grayscale Bittensor Trust represents a significant milestone for the decentralized AI sector. As institutional interest in crypto assets grows, regulated access to emerging technologies like Bittensor could play a key role in shaping the future of digital finance.