GRAYSCALE submits the first TAO spot ETF application in the US, Bittensor enters a new chapter of institutionalization

On December 31, 2025, the digital asset management giant Grayscale submitted an S-1 registration statement to the U.S. Securities and Exchange Commission, planning to convert its existing Bittensor Trust product into the first TAO spot ETF listed in the United States. If approved, this ETF will be listed and traded on the NYSE Arca platform under the ticker “GTAO.”

Grayscale’s AI Sector Strategy

The world’s largest cryptocurrency asset manager, Grayscale, is advancing its Bittensor spot ETF application with the U.S. Securities and Exchange Commission. According to the IPO filing submitted in November 2025, Grayscale manages over $35 billion in assets and offers more than 40 digital asset investment products covering over 45 cryptocurrencies. The company plans to transform its Grayscale Bittensor Trust launched last August into an ETF format.

If approved, this transition will mark further recognition of blockchain assets in the AI field by traditional financial institutions and provide investors with a way to gain exposure to TAO prices without directly holding tokens.

The Core Value of Decentralized AI Networks

Bittensor, as a decentralized AI network, incentivizes collaborative training of machine learning models and knowledge sharing through its native token TAO. Its unique architecture allows developers and researchers to contribute computing resources and earn rewards, creating an open and competitive AI marketplace environment. This stands in stark contrast to centralized AI giants and offers institutional investors a new way to participate in AI infrastructure development.

Grayscale explicitly states in its application that it believes Bittensor will become a key driver in the development of decentralized artificial intelligence.

Regulatory Framework for ETF Design

According to the application, the TAO ETF will adopt a dual custody strategy, collaborating with Coinbase Custody and BitGo to enhance asset security. This custody arrangement provides a foundation for meeting institutional compliance requirements while reducing operational risks associated with directly holding cryptocurrencies. The ETF structure prohibits pledging of held TAO unless specific future conditions are met.

This means the product will purely reflect TAO price movements without including staking yields, offering investors a clear and transparent investment objective.

Quantum Risks and Market Outlook

In research related to the TAO ETF application, Grayscale also assessed the potential impact of quantum computing on the crypto market. The company believes that the threat posed by quantum computing is limited in the short term, and at least until 2026, blockchain security and crypto asset prices are unlikely to be significantly affected by advances in quantum technology.

This judgment is based on several key factors: current quantum hardware remains in early development stages, the cryptocurrency community is well aware of this issue, and protocols transitioning to quantum-resistant algorithms are actively being developed. Grayscale notes in its analysis that market volatility often stems from immediate concerns rather than distant theoretical risks.

Bittensor Market Performance and Recent Developments

As of December 31, 2025, according to Gate data, TAO’s trading price was $222.1, up +1.69% in the past 24 hours. With a circulating supply of 9,597,400 TAO, Bittensor’s total market capitalization in USD is approximately $2.136 billion. Compared to yesterday’s price, Bittensor shows an upward trend. Historically, Bittensor’s highest price was $795.6, and its lowest was $21.42. The recent price increase coincides with the announcement of the Grayscale TAO ETF application, significantly boosting market attention on the decentralized AI sector and TAO.

Industry observers note that Bittensor’s subnet architecture—specialized AI applications built on its decentralized framework—is attracting enterprise interest seeking cost-effective and scalable solutions.

Challenges and Future Outlook

Although Grayscale’s TAO ETF application marks an important step in the institutionalization of the crypto market, the process still faces many uncertainties. The SEC has maintained a cautious stance toward spot cryptocurrency ETFs, and approval is not guaranteed. Additionally, Bittensor recently experienced its first halving, leading to increased volatility in liquidity and market sentiment. From a broader perspective, Grayscale’s submission of the TAO ETF application transcends a single product launch, representing a strategic move by crypto asset management firms to provide AI-related blockchain asset investment channels for mainstream investors.

As decentralized AI continues to develop, such ETFs could become a blueprint for future products, bridging the gap between traditional finance and blockchain technology innovation.

As of December 31, with the spreading news of Grayscale’s TAO ETF application, Gate data shows TAO’s price has risen to $222.1, with a daily increase of 1.69%, and the total market cap surpassing $2.136 billion.

The cryptocurrency market is witnessing a shift from purely speculative assets to vehicles for technological innovation. If the first TAO spot ETF is ultimately approved, it could open a new channel for traditional financial capital to flow into decentralized AI, with Bittensor’s subnet economy and the TAO halving mechanism serving as dual engines for this emerging sector.