Bittensor (TAO) plunges 16% amid broader crypto sell-off
Bittensor's native token, TAO, plunged 16% in 24 hours to $389 amid profit-taking and broader market sell-off. The decline followed a recent rally sparked by Europe's first staked TAO ETP launch. Broader market pressures, such as the Fed's hawkish stance, the Balancer exploit, and AI-sector capital rotation, contributed to risk-off sentiment. Total cryptocurrency market capitalization also dropped by 5.8% to $3.4 trillion, with over $250 billion wiped out. Bitcoin and Ethereum saw declines alongside other major cryptocurrencies, while liquidations exceeded $1.13 billion. The crypto ecosystem remains under pressure from macroeconomic headwinds and sector-specific challenges.
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Bittensor’s Token Experiences a Sharp Decline
Bittensor's token TAO plunged 16% in 24 hours, reaching lows of $389. This sharp decline occurred amid profit-taking following a recent spike in value. The drop outpaced the artificial intelligence sector’s overall decline of 9%, signaling a significant downturn for the top AI-related cryptocurrency. Macro-level pressures and risk-off sentiment, triggered by factors such as the Federal Reserve’s hawkish stance, the Balancer exploit, and AI-capital rotation, have contributed to this decline.
Market Conditions Amplify Losses
The decline in TAO coincided with a broader market slump, as Bitcoin approached $100,000, and the total cryptocurrency market capitalization fell below $3.4 trillion. Despite bullish outlooks for Bitcoin and the broader market, investors are dealing with increasing macroeconomic pressures. Panic selling and sector-specific challenges, particularly around artificial intelligence tokens, have exacerbated the situation for Bittensor's TAO.
Bittensor’s Performance and Profit-Taking Triggers
Bittensor, a decentralized machine learning protocol that incentivizes AI model training through blockchain, has seen its token TAO outperform recently, benefiting from gains in AI-related stocks like Nvidia. However, this momentum reversed as TAO tumbled to $389, marking a 16% intraday loss. Trading volume also surged 17% to $712 million, reflecting heightened panic selling.
Profit-taking intensified following Safello’s launch of Europe’s first staked TAO exchange-traded product (ETP), which had initially sparked a rally but failed to sustain bullish momentum.
Broader Cryptocurrency Market Sell-Off
The cryptocurrency market lost over $250 billion in value within 24 hours, resulting in a 5.8% contraction in the total market capitalization to $3.4 trillion. Bitcoin dropped by 6% to near $100,000, and Ethereum fell by 8% to $3,340, breaching key support levels at $3,550. Sentiment in the market has shifted to fear, with other major cryptocurrencies like Solana and XRP also posting significant losses. Liquidations across crypto derivatives markets exceeded $1.13 billion due to heightened selling pressure.
Impact of Federal Reserve and Balancer Exploit
The downtrend in the cryptocurrency market is also linked to hawkish remarks by Federal Reserve officials, which have dampened expectations for a rate cut in December. Additionally, Wall Street movements have also impacted the sentiment, with US spot Bitcoin and Ethereum ETFs reporting four consecutive days of outflows. Further denting confidence, the $128 million Balancer exploit has reignited concerns around smart contract vulnerabilities, as most contracts still rely on audit-based assurances rather than guaranteed security.