Bittensor (TAO) Set for Historic Halving, but Analysts Warn of ‘Sell the News’ Risk

Bittensor (TAO) is days away from its first-ever halving as the decentralized AI network nears the 10.5 million TAO supply mark. Scheduled on or around December 14, the event will cut daily token issuance by half.

This halving marks a pivotal point for Bittensor, mirroring Bitcoin’s (BTC) emission reduction model. While experts expect the event to trigger a positive price reaction, others warn of a “sell the news” event.

Bittensor Halving Mechanics and Supply Dynamics

Bittensor has a fixed supply cap of 21 million TAO, designed to create scarcity similar to Bitcoin. According to the latest data from Taostats, the circulating supply has reached 10,451,753 TAO, nearing the halving threshold.

This event will reduce daily emissions from 7,200 TAO to 3,600 TAO, impacting rewards for miners, validators, and subnet owners. Unlike Bitcoin’s time-based schedule, Bittensor’s halving activates when the circulating supply hits 10.5 million tokens.

Miner registration, network activity shifts, and the introduction of Alpha tokens can affect the timing, so the exact date is flexible. Furthermore, Subnet Alpha tokens, introduced in February 2025, follow the same emission schedule.

Why the Halving Matters

Halvings are typically considered bullish catalysts because they slow the rate at which new tokens enter circulation. Historical examples across Bitcoin (BTC), Litecoin (LTC), and Bitcoin Cash (BCH) show that markets often respond with anticipatory rallies driven by tightening supply dynamics and trader psychology. While outcomes vary, the narrative around scarcity tends to shape sentiment in the lead-up to emission cuts.

Grayscale’s Research Analyst Will Ogden Moore emphasized the long-term impact of this structural shift. He noted that reduced emissions naturally increase scarcity and can reinforce network value over time.

The analyst also pointed to Bitcoin’s trajectory through four halvings, during which the asset’s market value and network security continued to strengthen even as miner rewards declined. According to Moore, Bittensor’s inaugural halving represents a comparable milestone. This signals the maturing of the protocol as it progresses toward its fixed 21 million TAO cap.

“The early success of certain subnet-based applications and an increase in institutional capital in the Bittensor ecosystem, combined with the forthcoming TAO supply halving, could be a positive catalyst for price, in our view,” Moore added.

TAO Technical Outlook and Market Sentiment

Despite this, market sentiment regarding TAO sentiment remains cautious. An analyst stressed that, although the halving will enhance TAO’s long-term scarcity, the event itself is unlikely to spark an immediate price rally.

“I am not expecting TAO to move on the halving event. Over time, increased scarcity will matter.. as it has for Bitcoin every four years But.. I don’t see it being an important catalyst to price in the short term That said.. it is a major moment in the Bittensor journey,” the post read.

Another trader warned of a possible “sell the news” event as the halving approaches. He noted that TAO has already slipped below a key support zone and faced a sharp rejection during an attempted reclaim, signalling weakening bullish momentum.

“I warned of a potential sell the news event, and it is looking more likely that is the case….The 3 day zone I highlighted has been lost, and we have just seen an aggressive rejection on the reclaim attempt. If $300 now continues as resistance I think this very likely retraces to $230, and I would not be surprised to see it below $200 either,” the analyst stated.

TAO Performance Amid the Approaching December Halving Event. Source: X/ChiefraFba

Meanwhile, BeInCrypto Markets data showed that TAO has slipped nearly 28% over the past month. However, it has seen modest gains of 5.2% over the past week.

At the time of writing, the altcoin traded at $288.33, up 1.83% over the past day. Now, whether the halving event will reinforce the broader weakness or help boost market sentiment will become clearer in the days ahead.

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