Distilled, a prominent analyst on X (formerly Twitter), stated that $TAO is currently experiencing a resurgence after a period of decline. He mentioned that if you haven’t heard of $TAO by now, you’ve been living under a rock.

The analyst stated that TAO dominated the AI narrative last year, cooled off, and now it’s heating up again, making traders wonder if this is a fleeting moment, or if the token is evolving into something bigger.

The analyst highlights that $TAO experienced a surge following the launch of subnets in October 2023, where its value skyrocketed 10x. However, by March 2024, the coin’s value dropped 74% due to a broader market shift towards a risk-off environment. 

Despite the plunge, support for $TAO settled at $220 after multiple retests, signaling strong market confidence. With liquidity on the rise, there is speculation that $TAO might soon reach new highs, making it a focal point for both investors and speculators.

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Bittensor operates as a decentralized marketplace for “incentivized intelligence.” This structure allows top talent and innovators to contribute their expertise in exchange for crypto-based rewards, which are distributed in $TAO tokens. 

The marketplace is designed to help crypto projects like KaitoAI and MyShell outsource intelligence, making it easier to attract contributors. With 45 subnets already operational, projects such as ReadyAI and SocialTensor are leading the charge, outperforming competitors like GPT-4o while generating millions of AI-driven images daily.

Since its launch in 2021, $TAO has maintained a supply cap of 21 million tokens, similar to Bitcoin’s model, and follows a halving cycle every four years. The first halving is expected to occur in November 2025, which could potentially impact token distribution and rewards. 

Moreover, the growing demand for $TAO is driven by the increasing number of subnets and projects leveraging the platform. Each block generates 1 $TAO, which is shared between miners and validators, further influencing its supply-demand dynamic.

Read Also: Analyst Says Buying Kaspa Over Bitcoin Is ‘Simple’: KAS Price Prediction

While TAO’s price shows promise, it faces some key risks. One concern is the token’s inflation rate, which currently stands at around $3.2 million daily. This inflation could exert pressure on the token’s value, especially with the competition from other AI networks. 

Furthermore, horizontal competition and validator knowledge assumptions also pose challenges. However, the upcoming dTAO upgrade might realign incentives and spark further growth, solidifying $TAO’s role in the evolving crypto landscape.

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The post Is Bittensor’s TAO The ‘Biggest’ Bet In Crypto? Analyst Explains Why This AI Coin is Evolving Into Something Bigger appeared first on CaptainAltcoin.

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