This episode argues that Bittensor subnets represent a rare, early-internet-style investment opportunity, offering ground-floor valuations in a market on the verge of being unlocked by institutional capital.
The AI Boom and Sky-High Valuations
- Anthropic (Claude): Valued at $61.5 billion.
- Google DeepMind: Part of the $2 trillion parent company, Alphabet.
- Mistral AI: Valued at $6.2 billion, with a target of $10 billion.
- Cohere: Valued at $5.5 billion.
- Stability AI: Valued at $1 billion.
Jeffrey notes that these astronomical figures stand in stark contrast to the early days of the internet, where seed-round valuations were typically in the $1-5 million range, offering a much lower entry point for angel investors.
Bittensor Subnets: An Echo of the Early Internet
- Shoots (Subnet): The highest-valued subnet at approximately $80 million.
- Most Subnets: Valuations range from $1 million to $10 million.
Jeffrey explains that these low valuations are primarily due to high barriers to entry. Investors must navigate a new ecosystem, acquiring the $TAO token, setting up a specific Bittensor wallet, and learning the mechanics of staking—a process unfamiliar to those accustomed to Ethereum or Solana. He states, "For many of the people in crypto right now, that's just too far away from what they're already used to."
The "Magical Period" Before Institutional Inflow
- The Strategic Window: He estimates a "3 to 6 month" period where subnet valuations remain low before these new on-ramps are fully established and utilized by larger pools of capital.
- Personal Experience: As someone building a Bittensor hedge fund, Jeffrey confirms that the necessary "train tracks" for institutional investment have only become available within the last few weeks.
This period is framed as a unique moment where retail and early-adopter investors can gain exposure before the market matures and valuations potentially rise to meet those in the traditional AI sector.
Historical Parallels: Mt. Gox and the Dot-Com Boom
- Mt. Gox was an early, notoriously difficult-to-use Bitcoin exchange based in Japan. Jeffrey compares the complexity of wiring money to Japan and navigating the platform to the current "weird chain," "weird wallet," and "weird tools" of the Bittensor ecosystem.
- He reflects on his own experience founding a company in 1995, placing the current moment alongside the birth of giants like Amazon. He believes these generational opportunities only appear every 10 to 15 years.
- Unlike the internet or mobile waves, which required years of hardware build-out (broadband, smartphones), the Bittensor wave can propagate instantly on existing internet infrastructure, suggesting a potentially faster development cycle.
Actionable Resources for Subnet Research
- tow.io: A new publication described as a "newspaper" for the Bittensor universe, similar to TechCrunch for the Web 2.0 era.
- Podcasts:
- Tao Pod: Hosted by JJ and James Altucher.
- Hashrate: Mark Jeffrey's own podcast.
- Novelty Search: A Discord-based show hosted by Bittensor founder "Const," featuring interviews with subnet teams.
- Revenue Search by DSV: Hosted by Sam and Mark Greaser, this podcast focuses strictly on the financial and business models of subnets. Jeffrey praises its concise, 15-minute format and nuts-and-bolts approach.
Institutional Pathways: The Rise of Bittensor Hedge Funds
- DSV (Decentralized Capital Ventures): A Bittensor-focused hedge fund, as an option for accredited investors seeking managed exposure.
- DSV's Role: DSV has already deployed $3 million, actively analyzes tokenomics (the economic design and principles of a crypto token), and negotiates early-stage deals.
- Jeffrey, while noting DSV is technically a competitor to his own forthcoming fund, frames their presence as collaborative "coopetition" essential for building out the ecosystem, similar to how early internet companies grew the market together.
Spotlight on Promising Subnets
- Shoots: Provides AI model inference (the process of using a trained model to make predictions) at approximately one-sixth the cost of competitors.
- Score: A computer vision subnet whose first application is AI-based scouting for European football (soccer) teams.
- Quantum (Subnet 48): A newly announced subnet that aims to provide public access to real quantum computers, not emulators. Jeffrey calls this an "extraordinary announcement," marking the first time he has seen quantum computing made directly available to the public outside of a lab or government setting.
Conclusion
This episode frames Bittensor as a ground-floor opportunity analogous to the early internet, with subnet valuations yet to reflect the broader AI market's fervor. For investors and researchers, the key takeaway is the existence of a brief strategic window to engage before new infrastructure unlocks significant institutional capital.
