Bittensor (TAO) Rallies 27% on Grayscale ETF Filing and Halving Momentum

Bittensor (TAO) opens 2026 with powerful momentum as institutional and technical tailwinds converge. The decentralized AI token rallied 27% during the first trading week, primarily driven by Grayscale's landmark ETF filing. That rally pushed TAO near $300, approaching critical resistance levels that could signal further upside. Simultaneously, Bittensor's inaugural halving event tightened supply dynamics just as AI token demand accelerates across crypto markets according to reports. These developments highlight TAO's transition toward tangible utility through its expanding subnet ecosystem as analysis indicates.

Why did TAO surge 27% in early 2026?

Grayscale's regulatory filings catalyzed TAO's January rally by proposing the first U.S. Bittensor-focused ETF. This development marks a significant step toward institutional adoption, mirroring historical patterns where regulated products boost crypto credibility and liquidity according to data. The filing followed Grayscale's earlier launch of its Bittensor Trust (GTAO), which prompted a 10% single-day jump when unveiled. That rally lifted TAO above $290 with trading volume exceeding $230 million. These milestones reflect accelerating institutional infrastructure for decentralized AI assets. Technical indicators like Money Flow Index readings now signal improving demand conditions.

How do halving and institutional adoption reshape TAO's value?

Bittensor's first halving event in January 2026 fundamentally altered its supply mechanics by cutting daily emissions by 50%. This reduction creates structural scarcity under Bittensor's fixed 21 million TAO supply cap, establishing predictable deflationary pressure. The halving also extends to subnet alpha tokens, creating secondary supply constraints across the ecosystem. By contrast, institutional adoption expanded through products like Grayscale's Trust and the Staked TAO ETP (STAO) on the SIX Swiss Exchange according to analysis. These regulated vehicles enable traditional investors to access TAO without direct custody complexities as reported. Post-halving capital inflows appear robust as Chaikin Money Flow metrics confirm sustained buying pressure.

Can TAO reach $500 amid growing AI token demand?

Current price action near $300 positions $500 as a psychological and technical target for TAO. Achieving this requires holding key support at $217 while reclaiming resistance levels at $312 and $335 according to technical analysis. The broader AI token rally supports this narrative with TAO up 20% weekly while rivals like Fetch.ai (FET) gained 38% as reported. Decentralized AI networks like Bittensor are uniquely positioned as programmable intelligence becomes increasingly vital according to analysis. Over 120 operational subnets now enhance TAO's utility, such as Chutes which provides commercially viable AI inference services as data shows. This utility-driven demand combines with constrained supply as institutional adoption matures according to reports. Still, declining below $217 would invalidate the bullish technical thesis.