Crypto & AI Outlook: Why Barry Silbert Believes Bittensor is the Next Bitcoin

In a powerful declaration, DCG founder Barry Silbert positions the decentralized AI network Bittensor as his next decade-defining investment, drawing direct parallels to his formative, multi-billion-dollar conviction in Bitcoin a decade ago. He argues that Bittensor's unique, incentive-driven model for building artificial intelligence represents a fundamental paradigm shift, creating a permissionless "market for intelligence" poised to out-innovate the centralized giants of Big Tech.

Key Insights

Barry Silbert's "Epiphany": Bittensor is to This Decade What Bitcoin Was to the Last

According to Barry Silbert, his focus on Bittensor isn't just another portfolio allocation; it represents a core thesis shift on par with his initial discovery of Bitcoin. He has launched a new company, Yuma, with the exclusive mission of "doing for Bittensor what DCG did for Bitcoin," signaling a profound level of conviction from one of crypto's most influential builders and investors.

"I feel like every 10 years I kind of have a bit of an epiphany and a big idea. And 10 years ago for me it was bitcoin, today it's [Bittensor]. And we really just want to, we want to be a force for good." - Barry Silbert

Silbert draws numerous parallels between Bitcoin's early days and Bittensor's current state. He recalls buying Bitcoin at $7-8 when it was misunderstood and dismissed, seeing a similar dynamic with Bittensor today. He views the project's complexity and the difficulty for outsiders to grasp its potential as hallmarks of a truly disruptive technology in its infancy. This conviction is not merely theoretical; it's institutional, with Yuma being built to provide the infrastructure, acceleration, and capital deployment needed to catalyze the Bittensor ecosystem, much as DCG and Grayscale did for Bitcoin.

For investors, Silbert’s stance is a powerful signal. His track record of identifying paradigm shifts years ahead of Wall Street—from creating secondary markets for private shares to launching the first accessible Bitcoin investment vehicle (Grayscale)—lends significant weight to his claim. His "all-in" approach suggests he sees an asymmetric opportunity of a similar magnitude to investing in Bitcoin in 2012.

A Decentralized "Market for Intelligence" to Out-Innovate Centralized AI

The discussion framed Bittensor as a direct challenge to the "walled garden" model of AI development dominated by companies like OpenAI and Google. Instead of a single, monolithic entity controlling AI, Bittensor creates an open and permissionless network of competitions, which Barry Silbert calls "subnets."

"Think about a subnet as a competition... the owner of the subnet kind of, they set the rules and essentially the world competes to win that competition." - Barry Silbert

Each of the 128+ subnets functions as a specialized marketplace for a specific AI task, such as drug discovery, financial market prediction, or deepfake detection. Anyone in the world can launch a subnet or compete within one, contributing their data, models, or compute power. The network uses a sophisticated incentive mechanism to identify and reward the best-performing solutions in real-time. Silbert compares this moment to the mid-90s launch of the Netscape browser, which broke open the closed ecosystems of AOL and CompuServe, unleashing a Cambrian explosion of innovation on the World Wide Web. Bittensor, he argues, is doing the same for AI.

This model directly addresses the innovation bottleneck forming in centralized AI, where talent is hoarded via nine-figure salaries and proprietary data is locked away. By creating a system where anyone can monetize their contribution, Bittensor aims to harness the collective intelligence of the global developer community. For investors, this means the platform's value is not tied to a single team or model but to the aggregate innovation across its entire ecosystem.

"Digital Scarcity" for AI: Why TAO's Bitcoin-Like Tokenomics Are a Game-Changer

A critical pillar of Silbert's thesis is the economic design of Bittensor's native token, TAO. The network was deliberately modeled after Bitcoin's "sound money" principles, a feature that distinguishes it from the vast majority of crypto projects and provides a foundation of trust and scarcity.

"The TAO token itself, it is just like bitcoin, it is capped at 21 million. There's halvings, there was no VC round, there's no foundation allocation. Even the founders of [Bittensor] didn't get TAO when it was launched, just like Bitcoin." - Barry Silbert

This "fair launch" model is crucial. With no pre-mine for founders or large allocations for venture capitalists, the network avoids the insider-heavy structures that plague many modern tokens. Every participant, from the founders to the newest competitor, must earn their stake by contributing value to the network. This fosters a highly organic and meritocratic community. The hard cap of 21 million tokens and periodic "halvings" (the next is projected for January 2026) create a predictable and deflationary supply schedule, positioning TAO as a potentially durable store of value for the emerging AI economy.

For investors, these tokenomics are a powerful de-risking feature. The transparent and fair distribution model aligns incentives across all participants and protects against the dilution and insider selling pressure common in other projects. It establishes TAO not just as a utility token for accessing the network, but as a scarce, foundational asset analogous to Bitcoin.

The TAO Flywheel: A Self-Sustaining Economic Model for AI Innovation

Bittensor has engineered a powerful economic flywheel where its native token, TAO, is central to every transaction and value accrual mechanism within the ecosystem. This creates a reflexive loop that drives demand for TAO as the network grows, a dynamic distinct from platforms like Ethereum or Solana where the success of an application does not always directly translate to value for the native token.

"All the trading goes in and out of TAO in these... subnet tokens... if you buy a subnet token, it's essentially locking up TAO within that subnet liquidity pool." - Barry Silbert

The process works in several stages. First, the Bittensor network issues rewards in TAO (currently valued at an estimated $1 billion annually) to the best-performing miners and validators across all subnets. Second, each subnet has its own unique token, but these tokens are traded exclusively against TAO, not USD. This means any investment into a promising AI application on Bittensor requires buying and locking up TAO, directly increasing its demand and reducing its circulating supply.

Finally, as subnets mature, they can begin generating external revenue by selling their specialized intelligence. Silbert notes that these subnets are starting to use that revenue to buy back their own tokens, creating a value-capture mechanism similar to a corporate stock buyback. This entire cycle—from TAO emissions to subnet investment to revenue generation and buybacks—creates a self-sustaining economy that continuously rewards innovation and drives value back to the core TAO asset.

Insightful Quotes

Barry Silbert on the crypto asset landscape: "You have bitcoin, which kind of is separate apart from everything else. Then you have a very, very small number of projects that I think have utility... And then you have the rest and the rest is really just kind of crap. And I think most of it's going to go to zero."

Tom Lee on the shifting regulatory winds: "For the first time really in all the years I've been researching crypto, the regulatory environment is actually really open to the idea of allowing the innovation that comes from bitcoin and crypto and the decentralization and the trust on the blockchain to allow us to innovate the financial system."

Barry Silbert on Bittensor's incentive model: "Right now at the current bit tensor price, there's about a billion dollars right now per year of value that is up for grabs for anybody who wants to get involved with and contribute to the bit tensor network."

Market Implications

The conversation with Tom Lee and Barry Silbert outlines a clear, multi-layered investment thesis at the intersection of AI and decentralized finance. The primary implication is that Bittensor represents a ground-floor opportunity to invest in the foundational infrastructure of a new, decentralized AI economy.

• TAO as a Base Layer Asset: For investors, the most direct strategy is acquiring the TAO token. This is a bet on the growth of the entire Bittensor ecosystem. Because all subnet activity, trading, and liquidity are routed through TAO, the token is positioned to capture value from every successful application built on the network, functioning as the reserve asset for this emerging digital economy. Its Bitcoin-like scarcity further positions it as a potential hedge against the monetary easing and "money printing" that Silbert anticipates.

• Subnet Tokens as Venture-Style Bets: For those with a higher risk tolerance, the emerging ecosystem of subnet tokens offers a way to make targeted bets on specific AI applications. Investing in a subnet token is akin to early-stage venture capital, backing a specific team and idea with the potential for exponential returns if their AI model proves superior. Barry Silbert's Yuma plans to launch institutional-grade products to facilitate access to this nascent market, which is currently difficult for most investors to navigate.

• Early-Mover Advantage: The speakers repeatedly emphasized that the ecosystem is in its "very, very early" days. Access to TAO is just now expanding through platforms like Coinbase and the Grayscale Bittensor Tao Trust (GBTC) for accredited investors. The difficulty of access and the complexity of the project create a significant information asymmetry, presenting a window of opportunity for sophisticated investors to establish a position before the market becomes more efficient and widely understood.