Bittensor's TAO token experienced its first network halving on December 15, 2025, permanently reducing its daily issuance from 7,200 tokens to 3,600. This event cut the network's annual inflation rate from roughly 26% to approximately 13%, creating a significantly tighter supply environment for the AI-focused cryptocurrency.
The immediate market reaction was muted, with TAO's price showing a slight decline in a classic "sell the news" pattern. At the time of reporting, TAO was trading in the mid-$200s, specifically around $262.20, representing a decline of 5–8% over the previous 24 hours. Despite this short-term bearish momentum, the token remains well above its 2023-2024 base levels on a year-to-date basis.
The halving fundamentally alters the economics of the Bittensor network. All existing subnets must now compete for a smaller daily reward pool of 3,600 TAO. This increased competition is expected to pressure inefficient models and accelerate the network's evolution toward higher-quality, result-driven subnets.
Concurrently, Bittensor expanded its scope beyond software-based AI with the launch of a new hardware-focused subnet named ChipForge on December 16. This subnet incentivizes developers to design optimized RISC-V processors for edge AI applications, aiming to drastically reduce chip development costs. This move positions Bittensor to potentially capture value from the multi-billion dollar AI hardware market and compete with proprietary ecosystems from giants like Nvidia and Google.
Technical analysis of TAO's price action paints a bearish short-term picture. The asset trades in a clear daily downtrend below key moving averages, with momentum indicators like the MACD and RSI signaling seller dominance. Critical support levels are being tested, and a failure to hold could expose the token to further downside. Analysts suggest that while the 24-hour view is bearish, the longer-term, cycle-based view remains cautiously bullish due to TAO's structural ties to AI infrastructure and its newly enforced scarcity.
