I think I understand now why $TAO has sold off so hard in the last few days and I’d love to hear your thoughts on this theory:

Apart from a broader market sell off, $TAO has come off hard after previously exhibiting great strength in the first part of this selloff days back.  

I think this is because of the incoming dTAO staking protocol changes to the Bittensor network.  

There are thousands of investors who have been holding and staking $TAO since 2022.  Many are up multiple X’s on their initial investment and were happily parked in $TAO enjoying the 18%-20% returns with no lockups and no risk of losing any tokens. 

dTAO is slated to go live on feb 10th.  That’s only 8 days away.  So what does that mean?  

It means that the party is over for those investors.  They no longer can just stake their $TAO and make bank every month with no risk.  

If they want to earn money on the Bittensor network, now they will have to do research.  They will have to learn how to use the new staking platform and UI.  They will have to learn what all 64 subnets do, and make educated guesses on which of those subnets will do well in the short, medium, and long term and merit an allocation of their $TAO tokens.  

The stakes are high.  If they are wrong, they can lose principal, and fast.  If they are right, they can possibly multiply their bag of $TAO by 2x - 10x overnight or a few weeks/months.  Who knows?  It’s all very intriguing and very terrifying all at once.  

There are a lot of people currently holding TAO that truly want no part of that type of risk or the intensive research needed to actively manage those staking allocations.  

So, I believe they are capitulating.  Taking profits and moving their funds into cash or other projects that offer passive staking with less risk to principal.  

But it’s not all bad.  This is like an hanging of the guard.  They are selling their TAO tokens to buyers who are probably more sophisticated in their technical know how and understanding of this stuff and who have a much higher risk tolerance.  

These are buyers who are probably choking at the bit to get into the Bittensor ecosystem as an early bird when there is the most risk/reward available.  The bravest ones of us will probably be able to make a 10x pretty fast if we are willing to dive in and stake to specific subnets.  

I don’t know for certain that this is what happening.  this is my theory based on my understanding of human psychology, markets, and applying logic.