Early on Monday, the supply of new cryptocurrency tied to Bittensor—a decentralized network of AI projects—dropped by half. The halving was the first the currency has experienced and came about by design, reflecting how Bittensor shares the same anti-inflationary architecture as Bitcoin. The event also serves a milestone for one of the most novel and ambitious cryptocurrencies to launch in years.
Currently, Bittensor has a market capitalization of $2.7 billion, according to the crypto analytics site CoinGecko. That pales in comparison to Bitcoin but is number 50 on the list of most popular cryptocurrencies. It also enjoys the backing of influential crypto billionaire Barry Silbert. At a time when AI is dominating the economy and the political discourse, Bittensor offers the promise of a decentralized alternative to Big Tech—provided it can keep picking up traction in the crypto world and beyond, and if its price holds up following the new drop in supply.
Here’s an overview of exactly what Bittensor is, who’s betting on its success, and what some crypto prognosticators say will come next after its halving:
What is Bittensor?
Founded by Jacob Steeves, a former Google engineer, in 2019, Bittensor is designed to repurpose the mechanics of Bitcoin for AI. In the world of Bitcoin, owners of fleets of computer servers leverage their processing power to process and secure cryptocurrency transactions. This is called Bitcoin mining.
Similarly, Steeves devised a system where fleets of computers compete to process AI computations. In exchange for their processing power, these “miners” receive Bittensor’s cryptocurrency, TAO. In aggregate, Bittensor is like a decentralized server farm for AI. “How did we create a supercomputer that is bigger than any government or corporation can create with a centralized entity?” Steeves said to Fortune in 2024.
Who’s betting on Bittensor?
Bittensor isn’t the most easily understood tech, but the protocol has had some serious backers. In 2024, the crypto venture capitalist Polychain held around $200 million of the cryptocurrency, another crypto VC Dao5 held $50 million, and the crypto conglomerate Digital Currency Group had around $100 million
Barry Silbert, the billionaire founder of Digital Currency Group, is such a believer in Bittensor that he’s founded his own startup called Yuma that’s dedicated to the cryptocurrency. “It is the thing that I’ve gotten most excited about since Bitcoin,” he said.
When did Bittensor halve and what will come next?
On Monday at 8:30 a.m. New York time, Bittensor reduced the amount of daily tokens it issues from 7,200 to 3,600. Like Bitcoin, the supply of Bittensor’s cryptocurrency is capped at 21 million.
In a research note, analysts at Grayscale, a crypto ETF issuer and a subsidiary of Barry Silbert’s Digital Currency Group, said that the halving could be a “positive catalyst for price.” Just a week before, the ETF issuer announced that trading in the U.S. had begun for a vehicle that gives investors exposure to Bittensor.
Sami Kassab, managing partner at Unsupervised Capital, a hedge fund dedicated to Bittensor, was similarly optimistic. “Halvings aren’t complicated. Historically, halvings have been bullish because there’s simply less inventory hitting the market, “ he said. “The same logic applies to TAO.”
Still, over the past 24 hours, the price of Bittensor’s cryptocurrency has dropped about 5.5% to $272. That doesn’t mean the halving was a bust since the market often prices in such events ahead of time and, in the case Bitcoin, has often spurred subsequent booms. When Bitcoin last halved in April 2024, its price hovered around $65,000 shortly afterwards. But, by the end of the year, the world’s largest cryptocurrency had rocketed to above $100,000.
This is Bittensor’s first halving. Its next will follow in late 2029, according to current projections.
