Why Did Bittensor Surge More than 5% This Past Week?
Key Points
The macro environment has become more accepting for investors looking at AI-linked investments.
Bittensor's status as a leading network for machine learning and AI deployments has become a bullish catalyst once again.
A post-supply halving shock has continued to lead to high staking demand for TAO tokens, driving positive improvements for this token's fundamentals.
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One of the most actively promoted cryptocurrencies over the past few years, Bittensor (CRYPTO: TAO) has become a token best known for enabling investors to play the intersection of blockchain technology and artificial intelligence (AI). As a leading machine learning network, developers can use Bittensor to collaborate and train their models, with the network's native TAO token granting external access and enabling users to access AI-related applications in a way few other decentralized networks do.
Thus, the story around Bittensor really revolves around the speed of the AI revolution, spending trends in this sector, and how investors feel about the overall AI narrative moving forward. This past week, sentiment clearly improved on all fronts related to AI, propelling Bittensor's 5.1% gain over the past seven days (as of 3:30 p.m. ET).
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Let's dive into what other factors investors are watching with this key crypto network right now.
Fundamental improvements are driving a positive narrative around Bittensor this week
Source: Getty Images.
Yes, improving sentiment is a big deal for Bittensor (and all digital assets for that matter). However, a key structural driver underpinning Bittensor's better-than-5% move this week is a post-having supply shock. It was announced that December's reduction in daily emissions from 7,200 TAO to 3,600 such tokens left nearly three-quarters of the total supply of this token staked.
What that means, in layman's terms, is that incremental demand for TAO tokens can drive much more rapid price upswings for these digital assets. In combination with the aforementioned bullish macro developments in the AI sector and subnet usage picking up this past week (with a 34% increase on this front), I think there's more than just narrative-driven interest in Bittensor right now.
In fact, I think the network's scaling roadmap for subnet usage and its ability to host more AI workloads could drive greater demand than the market is pricing in right now. We'll see, but for now, this is a token down more than 50% this year, and I think Bittensor could have significant upside in the coming months.
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Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bittensor. The Motley Fool has a disclosure policy.
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