Grayscale moves toward launching the first U.S. spot ETF offering direct exposure to Bittensor’s TAO token.
Grayscale Investments has taken a fresh step in crypto markets as it targets a new AI-linked exchange-traded fund. The firm filed the documents seeking approval for a Bittensor-based product in the United States. This move comes after TAO experienced the first network halving, which may have piqued the interest of more investors.
Grayscale Pushes Bittensor ETF After TAO Halving
Grayscale submitted a Form S-1 registration statement to the US Securities and Exchange Commission on December 30, 2025. The filing aims to turn the existing Grayscale Bittensor Trust into a spot exchange-traded fund. Importantly, this would be the first ETF offering in the US providing direct access to Bittensor’s native token, TAO.
Previously, the Grayscale Bittensor Trust has been operating as a private vehicle since 2024. However, it was made into a public quote earlier this month, widening investor access. Now, the firm wants to get listed on the NYSE Arca under the ticker symbol GTAO. Therefore, institutional participation could be increased substantially.
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Grayscale said in the filing that the filing reflects increasing demand for diversification in digital asset exposure. A spokesperson said the firm is still focused on extending tools for investors. Meanwhile, the company is continually working on developing products in line with the changing needs of the crypto market, according to the statement shared with The Block.
The filing comes close on the heels of Bittensor’s first halving event that took place on December 14. At the time of the event, the number of daily TAO issuance was reduced from 7,200 tokens to 3,600 tokens. Historically, similar supply decreases have affected the pricing action of crypto markets.
TAO is the core asset of Bittensor, a decentralized AI-focused blockchain network. The protocol provides incentives to users who contribute their computing power and machine learning resources. In return, participants receive TAO tokens, which help in the collaborative development of AI.
Custody, Structure, and Regulatory Details Emerge
According to the filing, the proposed ETF will hold TAO directly, including tokens generated through staking activities. Grayscale disclosed plans to implement staking within the trust structure. This strategy could help to improve yield while preserving spot exposure for investors.
Coinbase will act as the trust’s prime broker, while Coinbase Custody Trust Company will serve as the primary custodian. As well, BitGo Trust Company will serve as a secondary custodian. Bank of New York Mellon appears as the transfer agent for the fund.
Importantly, NYSE Arca has already got a go-ahead that in-kind creations and redemptions are allowed for the trust. As a result, authorized participants are able to trade TAO directly for ETF shares. This mechanism is predicted to remain after conversion into an ETF.
As of December 29, 2025, the value of TAO is around $219.88, and the market cap is more than $2.11 billion. While prices dipped after the halving, they have now stabilized, according to market data cited by The Block.
Bittensor’s structure differs from traditional crypto networks, as it governs a decentralized artificial intelligence infrastructure. As a result, regulators may be faced with new classification and oversight questions. Observers anticipate that the SEC review process will involve a lot of close attention to both the crypto and AI sectors.
Overall, Grayscale’s filing is a signal of a growing interest in AI-driven blockchain assets from institutions. If approved, the ETF could provide a regulated avenue for investors to gain exposure to decentralised machine learning networks.
Source: https://www.livebitcoinnews.com/grayscale-files-for-first-u-s-bittensor-tao-spot-etf/
