TAO Plunges 20% Post-Halving Amid AI Crypto Headwinds

• TAO plummeted over 20% following its first halving, defying typical post-halving gains. According to reports
• Institutional ETF filings briefly boosted prices but failed to reverse the downtrend. Data shows
• The token remains 50% below its 2024 peak amid bearish technical indicators. Analysis indicates
• Recovery hinges on AI sector progress and regulatory approval for crypto ETFs. According to market analysis

Bittensor's TAO token faced intense selling pressure last week, plunging over 20% after its inaugural halving. This decline contradicts the scarcity-driven rallies typically seen in cryptocurrency halvings. Simultaneously, institutional interest emerged through Grayscale's ETF filing for TAO exposure. The token's trajectory reflects conflicting forces between sector headwinds and institutional validation attempts. Market participants now assess whether AI-focused cryptocurrencies can regain momentum.

Why Did TAO Crash After Its Halving Event?

TAO slid 22.1% despite the halving's intended supply reduction mechanism. Analysts identify a clear "buy-the-rumor, sell-the-news" pattern as investors exited positions post-event. The token's technical indicators turned bearish during this retreat. Cooling enthusiasm for AI crypto projects amplified downward pressure significantly.

Broader AI sector challenges contributed to TAO's underperformance beyond halving dynamics. Reduced deal flow and investor interest in artificial intelligence weakened demand for related tokens. TAO currently trades approximately 50% below its 2024 peak valuation. The market exhibits caution toward AI-driven crypto assets amid slowed industry progress.

Can Institutional Support Offset Bearish Momentum?

Grayscale's Bittensor Trust launch triggered a 10% TAO price surge. The trust provides institutional exposure without direct token ownership through OTC markets. Grayscale additionally filed to convert this trust into a spot ETF, mirroring strategies used for Bitcoin and Ethereum. Bitwise also sought TAO inclusion in a broader crypto ETF product. According to filings

The institutional momentum proved temporary as TAO dipped 1.5% within 24 hours of Grayscale's announcement. Technical indicators like the MACD and RSI maintained bearish signals despite these developments. Analysts project near-term consolidation between $212 and $260 resistance levels. Sustained institutional participation requires regulatory ETF approvals that remain pending.

What's Next for Bittensor's Market Trajectory?

Bittensor's network fundamentals show strength with $480k in daily revenue. Over 120 active subnets power the ecosystem, including projects like Targon generating substantial income. These structural advantages contrast with TAO's current 66% deficit from its all-time high valuation. Network utility must evolve beyond current capabilities for lasting recovery.

TAO's revival depends heavily on broader AI industry breakthroughs and ETF regulatory decisions. SEC approval for Grayscale's proposed spot ETF could unlock significant institutional capital flows. Still, the token requires sustained momentum independent of regulatory developments to reclaim previous highs. Market observers await clearer signals of AI crypto adoption acceleration.