Wall Street digital asset managers and exchange-traded fund (ETF) issuers Grayscale and Bitwise have initiated filings with the U.S. Securities and Exchange Commission (SEC) to launch the first investment funds tracking TAO, the native cryptocurrency of the AI-focused Bittensor network.
The move follows growing institutional demand for AI-related technologies. Bittensor is a decentralized blockchain protocol designed to create a peer-to-peer marketplace for AI and machine learning models, aiming to democratize research and development in the artificial intelligence sector.
Grayscale Seeks to Convert the $8 Million Grayscale Bittensor Trust (GTAO) Fund Into a Spot ETF
On Tuesday, both Grayscale Investments and Bitwise filed S-1 registration statements with the SEC to offer spot TAO ETFs. This marks the first attempt to launch a U.S.-listed fund offering direct exposure to Bittensor.
The former is seeking to convert its Grayscale Bittensor Trust, a closed-ended private fund launched in August 2024, into an ETF that would trade on NYSE Arca under the ticker symbol ‘GTAO’. Grayscale has named Coinbase Custody Trust Company LLC and BitGo Trust Company, Inc., as custodians for the trust’s assets.
Earlier this month, GTAO became more accessible to a broader set of investors via public quotation. The fund, with nearly $8 million in assets under management, began trading on OTCQX, a secondary market operated by OTC Markets Group Inc. Grayscale calls GTAO the first publicly quoted investment product in the U.S. designed to provide exposure to TAO.
Grayscale, a subsidiary of the Digital Currency Group, is one of the leading providers of crypto asset investment products. The company operates some of the largest ETFs tracking major cryptocurrencies like Bitcoin and Ethereum – Grayscale Bitcoin Trust (GBTC), Grayscale Bitcoin Mini Trust (BTC), Grayscale Ethereum Trust (ETHE), Grayscale Ethereum Mini Trust (ETH), and has also converted some of its single-asset altcoin trusts into ETFs – such as the Grayscale Solana Trust (GSOL), Grayscale XRP Trust (GXRP), Grayscale Dogecoin Trust (GDOG), and Grayscale Chainlink Trust (GLINK).
Additionally, the firm offers a range of private market funds that track assets like Avalanche (AVAX) and Zcash (ZEC), and publicly traded trusts backed by Basic Attention Token (BAT), Near Protocol (NEAR), and SUI.
Bitwise Expects to Launch 11 Spot Crypto ETFs Tracking TAO, AAVE, UNI, ZEC, NEAR, SUI, TRX, and ENA With 60/40 Ratio by March 2026
Meanwhile, Bitwise has filed a preliminary prospectus with the SEC to launch spot crypto ETFs tracking 11 digital assets, including Bittensor. The list prominently features governance tokens from leading decentralized finance protocols, such as Aave (AAVE) and Uniswap (UNI), privacy-focused Zcash (ZEC), native assets of newer layer-1 blockchains NEAR, SUI, and TRX, and other specialized digital assets like Ethena (ENA) and TAO.
Each proposed fund would operate under a consistent structural framework, where a minimum of 60% of the ETFs’ assets would be held directly in the underlying cryptocurrency, with the remaining portion allocated to other exchange-traded products (ETPs) that track the same digital currency.
The Bitwise TAO Strategy ETF will invest 60% of its funds in TAO and the remaining in an ETP directly invested in TAO. The tickers and expense ratios of the funds are not available yet, but filings indicate the products are expected to begin trading in March 2026. Additionally, the funds reverse the right to use futures contracts and other derivatives for precise exposure management purposes. This hybrid model aims to combine the direct ownership benefits of a spot ETF with the flexibility of derivative instruments.
Bittensor Completes First Halving; Slashes TAO’s Circulating Supply by 50%, From 7,200 to 3,600 Coins
On December 15, Bittensor completed its first halving event, reducing the daily issuance of TAO by 50%, from 7,200 to 3,600 coins. The process, triggered when the circulating supply reached 10.5 million TAO, aligns with a Bitcoin-inspired deflationary model designed to curb inflation and enhance token scarcity. It has cut the annual inflation rate of the asset from approximately 26% to 13%, potentially impacting its long-term value and the blockchain’s economic model.
The decentralized, AI-focused blockchain, which supports application-specific subnets, rewards users in TAO for contributing their computing power to improve and support its AI-powered sub-chains. Bittensor capped the maximum supply of TAO at 21 million units and halves its emission rate approximately every four years, similar to Bitcoin.
The completion of the halving has drawn the attention of institutional investors to Bittensor, with Grayscale and Bitwise’s spot TAO ETF filings signaling ongoing demand for AI-related products globally.
At the time of writing, Bittensor (TAO) is trading at $221.56 – up 1.18% in 24 hours.
