Bittensor (TAO): Insights into the Next Wave of AI and Blockchain Integration

When centralized AI models require training costs in the hundreds of millions of dollars, Bittensor offers a disruptive solution: migrating Bitcoin’s mining incentive model to the field of artificial intelligence. Through programmable economic incentives, decentralized computing power, models, and data compete and collaborate in an open market.

Bittensor’s founder Jacob explains its core philosophy this way: “We simply migrated Bitcoin’s proven ‘incentive + competition’ mechanism to intelligent production.”

01 Conceptual Innovation: When Bitcoin Mining Meets Artificial Intelligence

Bittensor’s founding idea stems from a simple yet profound observation. Founder Jacob Steeves, while working as a machine learning engineer at Google, witnessed firsthand how the “Attention Is All You Need” paper drove exponential development of large models.

Meanwhile, his mentor—an early Bitcoin supporter—introduced him to the concept of “energy/thermodynamic computation.” These seemingly unrelated paths converged in Jacob’s thinking.

AI’s essence is the study of feedback loops, while Bitcoin is the first programmable economic feedback loop. Based on this insight, Bittensor created an open protocol that transforms the “miner–reward–consensus” paradigm into “useful AI supply–market reward–network consensus.”

Unlike simple model aggregation platforms, Bittensor embeds programmable incentives directly into the AI learning process. Whoever provides more useful inference, training, or tools earns more rewards. This is a novel way to continuously optimize the quality of AI supply through market signals.

02 Market Pulse: TAO’s Price Trajectory and Current Status

Using data from the Gate platform, we can clearly track TAO’s market performance. As of December 4, TAO’s latest price on Gate was $299.2, with a circulating supply of 9,597,491 TAO and a total market capitalization of approximately $2.87 billion.

Compared to the previous day, the price dropped by 0.72%. This occurred against a backdrop of increased overall market volatility.

Historical data shows that Bittensor’s price trend reflects its development stages. The token’s early trading price was around $21.43, achieving an annual return of 1145.57% in 2023. Entering 2024, the opening price was $219.7, closing at $562.5, with an annual return of 156.03%.

Cyclical fluctuations are commonplace in the crypto space. From 2025 to date, TAO’s annualized return is -40.75%. This downward trend has sparked discussions about market phases, but also provides long-term investors a window to reassess their positioning.

Notably, an investor who bought 10 TAO early in 2023 and held until recently would still have realized considerable potential returns. This highlights the importance of a long-term perspective in technology-driven projects.

03 Ecological Vitality: Subnet Competitions and the Rise of Chinese Developers

Bittensor’s network architecture revolves around about 128 subnets, each focused on different tasks such as inference, training, reinforcement learning, code agents, storage, and prediction signals.

This mechanism has recently seen a major update: subnet registration and deregistration mechanisms have been restored. The subnet cap is 128; new subnets will replace the lowest-performing ones and receive a 4-month immunity period.

A striking phenomenon is the growing strength of the Asian presence in the Bittensor ecosystem, especially the influence of Chinese developers. Founder Jacob revealed during his recent first visit to China: “One of the largest subnets on Bittensor, Affine, is being built by Chinese developers, and it is becoming one of the most competitive mechanisms on the entire network.”

Even more impressive, the top three subnet projects on Bittensor are all built by Chinese teams, reflecting China’s engineering prowess at the intersection of AI and blockchain.

Chinese developers’ involvement is not limited to software—it extends to hardware resources as well. For example, Lium is a top subnet providing GPU resources, creating a permissionless market, with “many Chinese miners contributing these chips.”

04 Institutional Moves: From Grayscale to DCG’s Strategic Deployment

Institutional interest in the Bittensor ecosystem is growing. Grayscale has filed Form 10 for the Grayscale Bittensor Trust, the first step toward becoming an SEC reporting company.

This move aims to enhance the accessibility, transparency, and regulatory status of the TAO Trust, meaning its private placement holding period will be shortened from 12 months to 6 months.

Another significant capital development is the Nasdaq-listed TAO treasury company, TAO Synergies, completing an $11 million private placement.

Participants included digital asset strategy advisor James Altucher and well-known investment firm DCG (Digital Currency Group).

Meanwhile, Bittensor’s development studio and accelerator, Yuma, launched an asset management division—Yuma Asset Management—which secured a $10 million anchor investment from DCG. The division offers two investment tools: one for market-cap-weighted investments in all active subnets, and one for market-cap investments in top subnets.

These institutional moves not only inject capital into the Bittensor ecosystem but also bring greater compliance and mainstream market attention. Traditional investment institutions like Connecticut Innovations have also invested in Yuma Asset Management’s subnet token strategy through their AI/Q fund.

05 Outlook: Halving Event and Ecosystem Development

Bittensor is about to undergo its first halving event, expected to occur in 11 days. However, veteran community members are cautious, believing that given current bear market conditions and weak liquidity, the halving may not immediately trigger a significant price increase.

They point out that any immediate price surge would require substantial community-driven publicity, not just reliance on tokenomics. Currently, TAO has fallen below $270, down 11% over the past week.

At the protocol layer, Bittensor’s revenue mainly comes from selling inference services, computing power, automated machine learning, and providing signals to prediction markets. Founder Jacob is particularly bullish on prediction markets, seeing platforms like Kalshi and Polymarket as true fintech innovations.

Bittensor’s relationship with centralized AI labs is complex. Jacob notes that some U.S.-based centralized labs may not be interested because they “prefer control and centralization,” whereas Bittensor emphasizes openness and permissionlessness.

However, more open teams like DeepSeek, Kimi, and Moonshot may eventually connect resources to Bittensor or launch subnets on the network. Such cooperation may be only a matter of time.

Future Outlook

The latest developments in the Bittensor ecosystem demonstrate its ongoing vitality. With the restoration of the subnet registration mechanism, new subnets replace the lowest-performing ones and receive a four-month immunity period.

Meanwhile, the TAO from deregistered subnets will be distributed proportionally to alpha holders, which will “unlock TAO stranded in inactive liquidity pools and redirect it to more active areas of the network.” Each network upgrade further optimizes the efficiency of this decentralized AI market.

On the Gate platform, TAO spot and perpetual contract trading provide users with diverse options to participate in the ecosystem. As of December 4, the TAO/USDT spot price was $296.4, and the perpetual contract price was $296.

Whether you are a long-term token holder or a trader skilled at navigating market volatility, Gate offers you the right tools to participate in the decentralized AI revolution led by Bittensor.