Bittensor’s TAO Soars 80% Amid AI Hype
Key Takeaways
- The price of Bittensor (TAO) rose by 80% in April.
- Growth of subnets within the Bittensor ecosystem is seen as the main driver.
- Only 6% of TAO tokens are currently staked in subnets – indicating room for growth.
- Market data shows mixed signals: high leverage, but stagnant spot demand.
- A sustainable increase depends on real demand in the spot market.
Strong Price Performance in April
The native token of the Bittensor network, TAO, experienced a remarkable rally in April. With a gain of over 80%, TAO outperformed established cryptocurrencies like Bitcoin (BTC) and Solana (SOL). In the past week alone, the price surged by 30%.
What’s Driving the Surge?
A key factor behind the price increase is the growing demand for so-called subnets. These subnets are independent networks within Bittensor that specialize in artificial intelligence (AI). Developers building such projects are required to stake TAO tokens – increasing demand.
According to investor Mark Jeffrey, the market capitalization of all subnets has increased tenfold in just nine weeks, now exceeding $500 million USD. The number of active subnets has also risen – from 65 in January to 95 in April, representing a 46% growth.
Institutional Interest on the Rise
Despite the growth so far, only around 6% of all TAO tokens are currently staked in subnets, according to analyst DeFi Jeff. This leaves room for further expansion. Institutional investors such as Unsupervised Capital and crypto funds like YumaGroup and DCG are increasingly investing in the Bittensor ecosystem.
Market Data Shows Mixed Signals
A look at current market data suggests that the price surge is not fully supported by real demand. According to Coinglass, trading volume on Binance dropped by $214 million USD over the past seven days. At the same time, TAO tokens worth $390,000 USD were transferred to the Kraken exchange – a possible sign of selling intentions.
While Binance users purchased TAO worth $192,000 USD, the so-called Spot CVD (Cumulative Volume Delta) remained flat. This indicates that demand in the spot market – actual token purchases without leverage – has not increased.
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Leverage Driving Price – But How Sustainable?
Another warning sign comes from the Open Interest (OI), which refers to the volume of open derivative positions. This figure rose by 100% over the past week. This means many traders are speculating on rising prices using leverage. Such movements are often short-lived and can quickly reverse if real demand does not follow.
Our Assessment
Bittensor shows exciting growth in the field of artificial intelligence and decentralized networks. The subnets offer an innovative solution with long-term potential. However, the current price increase is partly driven by speculative capital. As long as spot market demand does not significantly increase, the risk of a correction remains.
If you’re considering investing in TAO, keep an eye on subnet development and monitor market volume as well as open interest. A sustainable upward trend requires real demand, not just leverage.
Sources
- Backprop
- TaoStats
- Coinglass
- Coinalyze
- CoinGecko
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