Grayscale Bittensor Trust (TAO)

What they do

The Trust holds TAO and periodically issues common units of fractional undivided beneficial interest ('Shares') to accredited investors in exchange for TAO deposits. It is a passive vehicle with no officers, directors or employees, managed by Sponsor Grayscale Investments Sponsors, LLC, with CSC Delaware Trust Company as trustee, Continental Stock Transfer & Trust Company as transfer agent, and BitGo Trust Company, Inc. as custodian. It does not use leverage, derivatives or similar arrangements and seeks only to track the price of TAO.

Revenue drivers

• TAO holdings (passive appreciation) — The Trust's value derives from holding TAO; as of December 31, 2025 each Share represented approximately 0.0192 TAO and the Trust held about 0.3% of TAO in circulation. Changes in TAO price flow through as net change in unrealized appreciation or depreciation rather than operating revenue.
• Share creations for TAO deposits — The Trust issues Shares on a periodic basis to accredited investors under Regulation D in exchange for deposits of TAO; these creations are the mechanism by which the Trust grows assets, not a fee-based revenue line.
• Sponsor's Fee paid in TAO — The Trust pays the Sponsor's Fee in TAO, and realized gains and losses are recognized when settling that obligation. This expense reduces the TAO held and therefore NAV per Share.

Recent performance

Annual net income for 2025 was negative $6.0 million, reflecting the Trust's cost structure and fair value changes rather than operating revenue. The latest balance sheet as of June 30, 2026 shows total assets of $9.4 million and total liabilities of $0.00. As of December 31, 2025 the Trust held approximately 0.3% of TAO in circulation and each Share represented approximately 0.0192 TAO. The 10-Q states that to date the Trust has not met its investment objective and Shares have traded at premiums to TAO value, at times substantial, because there is no ongoing redemption program and no arbitrage mechanism.

Strategy

In December 2025 the Trust filed a Form S-1 registration statement for a proposed public offering of Shares and intends to list on NYSE Arca under the ticker GTAO, renaming itself Grayscale Bittensor Trust ETF. The registration statement has not been declared effective and Shares currently trade only on OTCQX and are offered solely through private placements. The Sponsor plans structural and operational changes alongside listing, including an ongoing redemption program allowing Authorized Participants to create and redeem Shares in large baskets. The Trust may also halt creations for extended periods, including in connection with forks, airdrops and similar occurrences, and the Sponsor may dissolve the Trust under certain circumstances.

Risks

• No redemption program / premium risk — The Trust is not operating a redemption program, so Authorized Participants cannot arbitrage deviations between the market price of Shares and NAV, and the Shares may trade at a substantial premium over or discount to NAV per Share.
• Registration and listing not assured — The Form S-1 has not been declared effective by the SEC and NYSE Arca has not approved the listing, so there is no assurance the Trust will convert to an ETF, implement redemptions, or that an active trading market will develop.
• Security classification of TAO — If the Sponsor determines TAO is a security under federal securities laws, including after a court ruling, the Sponsor does not intend to hold TAO in violation of those laws and would either dissolve the Trust or seek to operate it in compliance with the Investment Company Act.
• Concentration and related-party conflicts — DCG, the sole equity holder and indirect parent of the Sponsor, is reported to be one of the largest holders of TAO and has investments in companies closely involved in the Bittensor ecosystem, creating conflicts of interest for the Sponsor.

Outlook

Management's stated direction is to complete the pending registration and list the Shares on NYSE Arca as Grayscale Bittensor Trust ETF, with an ongoing basket creation and redemption program that would align operations with an exchange-traded product model. The Trust acknowledges it has not met its investment objective to date and that Shares have traded at premiums to TAO value. There is no assurance the SEC will declare the registration effective, that NYSE Arca will approve listing, or that an active trading market will develop and be sustained.