Bittensor’s native token, TAO, took a sharp hit—dropping around 17% in just a few hours—after a major fallout within its ecosystem. The trigger? One of its most important contributors, Covenant AI, publicly walked away from the project.
What went wrong?
Covenant AI, the team behind the Covenant-72B model—often described as one of the largest decentralized AI training efforts—announced its exit on Thursday.
The statement from founder Sam Dare was unusually blunt. He claimed the vision that attracted developers and investors to Bittensor “wasn’t what it seemed,” and accused co-founder Jacob Steeves of taking centralized control over their subnet once it became successful.
So far, Steeves hasn’t responded, and that silence has only added to the uncertainty.
Why the reaction was so sharp
The sell-off wasn’t just about the news—it was about what the news represents.
TAO had been on a strong run recently, up around 140% in six weeks, with most of that momentum building after early March. Much of the optimism was tied to Covenant-72B’s success and growing institutional interest, including a proposed TAO trust.
Now, that narrative has taken a serious hit.
Where things stand now
At the moment, TAO is hovering near $280, and technically, it’s in a weak spot.
The key $300 level has already broken
Price was rejected earlier near $360, even before this news
Indicators had already started turning bearish
For the price to stabilize, TAO would need to climb back above $300 quickly, ideally supported by some clarity from the team. If that happens, a move toward $320–$330 is possible.
If not, and uncertainty continues, the downside could extend toward $250 or lower.
Sentiment tells its own story
Interestingly, TAO had been trending heavily on social platforms, but the mood wasn’t entirely positive. For every positive comment, there were noticeably more negative ones, hinting that the rally may not have been as strong beneath the surface as it looked on charts.
Bigger issue: trust
What’s really being questioned here isn’t just price—it’s how decentralized the network actually is.
When one of the biggest contributors calls out the system so publicly, it shakes confidence. And in crypto, once trust starts to slip, money tends to move elsewhere pretty quickly.
Where the money is heading
That shift may already be happening. As uncertainty grows around TAO, some traders are looking at newer infrastructure plays.
One name that’s been getting attention is Bitcoin Hyper, a Layer 2 project aiming to bring faster, more flexible smart contract capabilities to Bitcoin. The idea is to combine Bitcoin’s security with high-speed execution, something the network has traditionally struggled with.
The project is still in its early stages but has already raised significant interest during its presale phase.
The takeaway
TAO’s drop isn’t just another price swing—it’s a reaction to deeper concerns about governance and control.
What happens next depends largely on how Bittensor responds. A clear explanation could calm things down, but continued silence or further exits might keep the pressure on.
