On Monday morning, the issuance of new cryptocurrency linked to Bittensor, a decentralized network focused on artificial intelligence projects, was cut in half. This halving marks the first occurrence for this digital currency and was intentionally implemented, mirroring the anti-inflationary principles seen in Bitcoin. The event signifies a significant benchmark for one of the most innovative cryptocurrencies introduced in recent years.
As per data from the crypto analytics platform CoinGecko, Bittensor currently boasts a market capitalization of $2.7 billion. While this figure may seem modest compared to Bitcoin, it positions Bittensor as the 50th most prominent cryptocurrency. Additionally, it has garnered support from notable crypto investor Barry Silbert. In an era where artificial intelligence is increasingly influencing both the economy and political discussions, Bittensor proposes a decentralized alternative to traditional tech giants, contingent upon its ability to gain traction in the crypto arena and maintain its price stability following the significant supply reduction.
An Overview of Bittensor
Established in 2019 by Jacob Steeves, a former engineer at Google, Bittensor aims to adapt the mechanics of Bitcoin for the realm of artificial intelligence. In Bitcoin’s ecosystem, owners of extensive computer server networks utilize their computational capabilities to validate and secure cryptocurrency transactions, a process known as Bitcoin mining. In a similar vein, Steeves has created a framework in which networks of computers compete to execute AI computations. In return for their computational contributions, these “miners” earn Bittensor’s cryptocurrency, known as TAO. Collectively, Bittensor functions as a decentralized server farm dedicated to AI. “How did we create a supercomputer that is larger than any government or corporation can create with a centralized entity?” Steeves remarked in an interview with Fortune in 2024.
Investors Supporting Bittensor
While Bittensor may appear complex, it has attracted substantial investment from influential figures in the technology and finance sectors. In 2024, the venture capital firm Polychain held approximately $200 million worth of the cryptocurrency, while another investment firm, Dao5, possessed around $50 million. Additionally, the Digital Currency Group, led by billionaire Barry Silbert, had about $100 million invested in Bittensor. Silbert’s enthusiasm for Bittensor is so profound that he has established a new startup named Yuma, specifically dedicated to advancing the cryptocurrency. “It is the most exciting development I’ve encountered since Bitcoin,” he stated.
Details of the Halving and Future Projections
At 8:30 a.m. New York time on Monday, Bittensor reduced its daily token issuance from 7,200 to 3,600. Similar to Bitcoin, the total supply of Bittensor’s cryptocurrency is capped at 21 million tokens. Analysts from Grayscale, a cryptocurrency ETF provider and a subsidiary of Silbert’s Digital Currency Group, noted in a research report that the halving could serve as a “positive catalyst for price movements.” Just a week earlier, the firm announced the launch of a trading vehicle in the U.S. that offers investors exposure to Bittensor.
Optimism was also echoed by Sami Kassab, managing partner at Unsupervised Capital, a hedge fund invested in Bittensor. “Halvings are straightforward. Historically, they have led to bullish trends because there is simply less supply available in the market,” he commented. “The same rationale applies to TAO.” However, despite the halving, Bittensor’s cryptocurrency price experienced a decline of approximately 5.5% to $272 over the past 24 hours. This drop does not necessarily indicate failure, as the market frequently anticipates such events, and in Bitcoin’s case, previous halvings have often triggered subsequent price surges. Following Bitcoin’s last halving in April 2024, its price was around $65,000, but by the end of that year, it had soared past $100,000. This marks Bittensor’s inaugural halving, with the next one projected to occur in late 2029.
