Bittensor's native token TAO has rallied approximately 40% over two days, significantly outperforming a generally bearish crypto market. This surge is attributed to a powerful narrative shift, where investors are increasingly viewing decentralized artificial intelligence (AI) infrastructure as a critical alternative to the centralized control of major tech corporations like OpenAI, Anthropic, and Google.
Investor and commentator Finance Freeman argues that the "control problem" of centralized AI—where a handful of companies control the most powerful models, compute, and access—creates structural risks the market may be underpricing. "The smarter AI gets, the less comfortable people become with it being controlled by a handful of closed companies," he stated. This growing discomfort is fueling interest in Bittensor's model, which applies "Bitcoin-style incentives to AI itself," creating an open network where models compete and contributors earn rewards based on usefulness.
The rally coincides with a broader recovery in the AI crypto sector, which has rebounded 30.93% since February 12 after losing 30.28% of its market cap over the prior month. Other AI tokens like Render (RNDR) and NEAR Protocol (NEAR) have also posted gains of 18% and 15%, respectively.
Fundamental supply dynamics are amplifying the price movement. A halving event in December reduced Bittensor's daily token emissions from 7,200 TAO to 3,600 TAO. With nearly 75% of the total supply now staked, the resulting supply shock means incremental buying demand can have a more pronounced effect on price. Network activity is also growing, with subnet usage increasing by 34% over the past week.
Technically, analysts see potential upside targets at $241 and $268, though the longer-term trend remains bearish unless TAO can close above the January high of $302.40. The token is currently trading around $188.90, with a market capitalization of $1.9 billion. Despite the recent surge, TAO remains down more than 50% year-to-date.
