OkThe AI-driven rush across cryptocurrencies shows just how decentralized the world has become.
What started out as an attempt to centralize financial transactions, allowing peer-to-peer transactions without intermediaries, has now grown into a blockchain network incorporating AI to speed up transactions.
In this case, the latest FUD around Bittensor (TAO) it seems driven by emotions. In news, Covenant AI, one of Bittensor’s largest and most active units, has recently gone offline, causing uncertainty.
However, the biggest concern is not just getting out, but thinking about it afterwards. In a post on XThe AI agreement stated that Bittensor no longer operates as a regular network.
The group said that key decisions remain controlled by the central government. They claim that the network administration has stopped the air of the subnet and removed the control of the people. The group also said that the administration abandoned construction and used the financial crisis to sell tokens.
In their view, this reflects the central control that operates behind the divisive narratives. The team explained that,
We can’t raise money, attract talent, or ask our community to use resources above a foundation that one person can take down at will. It’s not a risk we’re willing to put our trust in.
Naturally, this raises an important question: Is the FUD surrounding TAO just driven by ideology, or does it reflect deeper concerns in the network?
TAO extends losses as Bittensor faces systematic review
The 2026 cycle has strongly challenged the idea that AI is just another hype-driven issue.
In fact, market data shows that investment in AI-focused projects remains strong.
From a technical point of view, Bitcoin (BTC) it only added 2.14% increase in the market for the month. In contrast, the AI token sector has shown significant growth.
According to CoinMarketCap data, the market interest of AI-related tokens increased by about 13%, while the trading volume increased by about 70% during the same period.
TAO’s quarterly performance reinforces this, with the AI token approaching nearly 40%, while Bitcoin posted a 22.04% Q1 drop. In this context, TAO’s recent pullback points to an impending systemic weakness.
Following the exit of the AI Agreement in Bittensor, TAO increased its daily loss by 13.3%, bringing the loss to about 25% within 72 hours of trading.
As a result, much of what was previously raised, including a $43 million Q1 investment and the prospect of a Grayscale ETF, did not materialize.
According to AMBCrypto, this is where the AI story begins. As mentioned earlier, the recent capital flows into AI tokens, including TAO, continue to reflect the interest of investors in AI-focused projects and a significant shift towards AI-driven crypto trends.
However, the emergence of the AI Treaty in Bittensor has clearly challenged this issue. From a technical point of view, this makes the TAO weakness appear as a short-term shock and as a structural concern.
Therefore, the recent drop may indicate the beginning of TAO problems.
Brief Summary
- The AI-driven movement across crypto is growing, with the financial shift into AI tokens showing market interest and growing faster than larger assets like BTC.
- However, the emergence of the AI Agreement in Bittensor has raised concerns. The recent TAO breakdown suggests weakness may be more than a short-term shock.
