Bittensor just halved its supply. Here’s what that means

Currently, Bittensor has a market capitalization of $2.7 billion, according to cryptocurrency analytics site CoinGecko. This pales in comparison to Bitcoin but it is number 50 on the list of most popular cryptocurrencies. It also has the backing of influential cryptocurrency billionaire Barry Silbert. At a time when artificial intelligence is dominating the economy and political discourse, Bittensor offers the promise of a decentralized alternative to big tech companies — provided it can continue to attract interest in the cryptocurrency world and beyond, and if its price holds up after a new decline in supply.

Here’s an overview of exactly what Bittensor is, who’s betting on its success, and what some cryptocurrency forecasters say will come after the halving:

What is Betensor?

Founded by Jacob Steeves, a former Google engineer, in 2019, Bittensor is designed to reuse Bitcoin’s AI mechanisms. In the world of Bitcoin, owners of fleets of computer servers leverage their processing power to process and secure cryptocurrency transactions. This is called Bitcoin mining.

Likewise, Steves devised a system in which fleets of computers compete to process AI calculations. In exchange for their processing power, these “miners” receive the Bittensor cryptocurrency, TAO. Overall, Bittensor is like a decentralized AI server farm. “How did we create a supercomputer that was bigger than any government or company could create with a central entity?” Steves said luck In 2024.

Who’s betting on Bettensor?

Bittensor isn’t the most easy-to-understand technology, but the protocol has some serious backers. In 2024, crypto venture capital firm Polychain had about $200 million worth of cryptocurrency, another cryptocurrency VC Dao5 had $50 million, and cryptocurrency giant Digitalency Group had about $100 million.

Barry Silbert, the billionaire founder of the cryptocurrency group, is such a believer in Bittensor that he founded his startup called Yuma dedicated to cryptocurrencies. “This is the thing I’ve been most excited about since Bitcoin,” he said..

When did the Bittensor halve and what will happen next?

On Monday at 8:30 a.m. New York time, Bittensor reduced the amount of daily tokens it issues from 7,200 to 3,600. Like Bitcoin, Bittensor’s cryptocurrency has a maximum supply of 21 million.

In a research note, analysts at Grayscale, a cryptocurrency ETF issuer and a subsidiary of Barry Silbert’s cryptocurrency group, said the halving could be a “positive price catalyst.” Just one week ago, an ETF issuer announced that trading had begun in the US for an instrument that gives investors exposure to Bittensor.

Sami Kassab, managing partner at Unsupervised Capital, a hedge fund dedicated to Bittensor, was similarly optimistic. “Halvings are not complicated,” he said. “Historically, halvings have been bullish because there is simply less inventory in the market.” “The same logic applies to TAO.”

However, over the past 24 hours, the price of Bittensor’s cryptocurrency fell by about TK% to $TK. This does not mean that the halving was a crash since the market often prices such events in advance and, in the case of Bitcoin, often leads to subsequent booms. When Bitcoin last halved in April 2024, its price was hovering around $65,000 shortly thereafter. But by the end of the year, the world’s largest cryptocurrency had risen to more than $100,000.

This is the first half for Bittensor. The next will follow in late 2029, according to current projections.