Bittensor Surges 27% as Grayscale Files for First TAO ETF in US

Bittensor's TAO token is gaining momentum in 2026 as institutional interest grows, driven by Grayscale's strategic move to convert its Bittensor Trust into an ETF. The trust, currently trading on OTC Markets, aims to provide institutional investors with a liquid and regulated way to access the decentralized AI platform. This development reflects broader trends in the crypto market, where regulated products enhance liquidity and credibility for digital assets.

The recent halving event significantly reduced the supply of newly minted TAO tokens, creating favorable conditions for price appreciation. This supply constraint is occurring alongside rising demand for AI compute services, as Bittensor's decentralized marketplace continues to attract users and revenue-generating subnets.

Grayscale's filing for the TAO ETF is a pivotal moment for the token, as it aligns with the company's strategy to expand institutional access to digital assets. The move could enhance TAO's liquidity and attract further capital from institutional investors, similar to the impact seen with Bitcoin and Ethereum ETFs.

What Drives Bittensor's Institutional Appeal?

Bittensor is increasingly seen as a decentralized infrastructure layer for AI, with over 128 active subnets generating real-world revenue. The platform's unique structure allows users to earn TAO by contributing compute and AI services, creating a utility-driven demand for the token. Grayscale's GTAO trust has enabled accredited investors to gain exposure to TAO without direct custody of the asset. This accessibility has drawn interest from traditional investors looking to diversify their portfolios with digital assets.

The TAO token's price has also benefited from growing adoption of AI-driven infrastructure. The network's recent performance indicates that it may capture a larger share of the global AI market, currently valued at $300 billion. Analysts suggest that if Bittensor captures even 1% of this market, it could significantly increase TAO's valuation.

What Are the Key Risks and Market Indicators for TAO?

While the recent price surge is encouraging, TAO faces potential downside risks if selling pressure increases. The token's immediate resistance is at $312, with a longer-term target of $500. Technical indicators such as the Money Flow Index suggest improving conditions, but a sustained move above the neutral threshold is needed to confirm rising demand.

Holder behavior remains supportive, as most wallets that accumulated TAO in the last seven months remain underwater or only marginally profitable. This cost basis structure reduces near-term selling pressure and gives TAO room to continue its upward trajectory. Institutional investors have also begun allocating capital to TAO, creating textbook supply-demand dynamics.

Bittensor's future depends on a combination of constrained supply, rising institutional demand, and expanding network utility. If these conditions continue, TAO may see further appreciation in the coming months, potentially reaching $400 by the end of Q1 2026.