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CORRESP
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filename1.htm

BTCS
Inc.

9466
Georgia Avenue #124

Silver
Spring, MD 20910

January
31, 2024

VIA
EDGAR

Securities
and Exchange Commission

Division
of Corporation Finance

Office
of Crypto Assets

  Re:
  BTCS
  Inc.

  Form
  10-K for the Fiscal Year Ended December 31, 2022

  Form
  10-Q for the Quarterly Period Ended September 30, 2023

  File
  No. 001-40792

Ladies
and Gentlemen:

This
letter is submitted by BTCS Inc. (the “Company” or “BTCS”) in response to the comment letter dated January 22,
2024 issued by the Staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the
“Commission”) with respect to the Company’s Form 10-K for the Fiscal Year Ended December 31, 2022 and the Form 10-Q
for the Quarterly Period Ended September 30, 2023.

For
your convenience, each of the Staff’s comments have been restated below in their entirety, with the Company’s responses set
forth immediately beneath such comment.

Form
10-K for the Fiscal Year Ended Year Ended December 31, 2022

General

1. We
                                            note your response to prior comment 1. We continue to consider your response and may have
                                            further comments.

Response:

Understood.

2. Refer
                                            to your response to prior comment 2. In your response letter, you state that your business
                                            should be viewed as “more akin to that of a service provider that supplies computer
                                            hardware or software,” and that you, therefore, do not engage with the crypto assets
                                            in such a way that the identification of crypto assets as securities will impact your business,
                                            financial condition and results of operations. Further, you state that you have determined
                                            that how you account for the crypto assets you hold will not change as you believe that,
                                            “despite certain crypto assets being identified as securities by the SEC, they do not
                                            meet the definition of a security under U.S. GAAP pursuant to ASC because the decentralization
                                            of the blockchains will result in the participation of the digital assets no longer being
                                            linked to participation in property or an entity.” In future filings, please add risk
                                            factor disclosure addressing the risks and limitations of your determinations, including
                                            that they are risk-based judgments and not a legal standard or determination binding on any
                                            regulatory body or court. Also address the risks to your business, financial condition and
                                            results of operations if a regulatory body or court finds that your conclusions are incorrect.

Response:

The
Company acknowledges the Staff’s comment and in future filings will include an expanded disclosure and risk factor substantially
in the form below.

    Securities and Exchange Commission

Division of Corporation Finance

Office of Crypto Assets

Page 2

January 31, 2024

“We
note that in separate SEC complaints, the SEC has alleged several crypto assets we hold, specifically Cardano, Tezos, Solana, Cosmos,
Polygon, Axie Infinity, and NEAR Protocol are securities. The Company has conducted a detailed legal analysis which has led us to determine
that certain crypto assets that are identified as securities by the SEC should not impact our business, financial condition, and results
of operations. Provided, however, if over 40% of our assets are considered securities excluding cash we may be considered a 1940 act
company (see the risk factor on page 20 of our Annual Report on Form 10-K). Further, the aforementioned assessment is risk-based judgments
and not a legal standard or determination binding on any regulatory body or court. To the extent a regulatory body or court finds that
our conclusions are incorrect, we may seek to cease certain of our operations. Any such action may adversely affect an investment in
us.”

3. We
                                            note your response to prior comment 8 and reissue in part. In your response, please (i) include
                                            your calculation under section 3(a)(1)(C) of the Investment Company Act, identifying each
                                            constituent part of the numerator and denominator and (ii) identify the assets that you treat
                                            as “cash items” for purposes of your analysis.

Response:

The
table below details, as of June 30, 2023, the crypto asset holdings supporting our response to prior comment 8, utilizing the impaired
book value of our crypto assets (as opposed to the fair market value). The cash items excluded from the “Total Assets” figure
consists only of USD cash deposits held in Company checking accounts. Upon request we can provide additional calculations for other periods
but note that the results are similar.

    Crypto
    Asset
    Book
    Value
    %
    of Total Assets (excl. Cash)

    Ethereum
    (ETH)
      5,176,274
      61 %

    Cardano
    (ADA)
      60,686
      1 %
      (a)

    Kusama
    (KSM)
      140,203
      2 %

    Tezos
    (XTZ)
      17,533
      0 %
      (a)

    Solana
    (SOL)
      62,569
      1 %
      (a)

    Polkadot
    (DOT)
      33,442
      0 %

    Cosmos
    (ATOM)
      1,665,976
      20 %
      (a)

    Polygon
    (MATIC)
      165,870
      2 %
      (a)

    Avalanche
    (AVAX)
      187,050
      2 %

    Axie
    Infinity (AXS)
      236,126
      3 %
      (a)

    Kava
    (KAVA)
      167,948
      2 %

    Band
    Protocol (BAND)
      948
      0 %

    Mina
    (MINA)
      30,562
      0 %

    Oasis
    Network (ROSE)
      105,908
      1 %

    Akash
    (AKT)
      19,573
      0 %

    NEAR
    Protocol (NEAR)
      89,480
      1 %
      (a)

    Evmos
    (EVMOS)
      25,888
      0 %

    Total
      8,186,036
      97 %

    Total
    Assets (excluding Cash)
    $ 8,470,266
      (b)

    Threshold:
    Total assets x 40% test
    $ 3,388,106

    Total
    - Assets identified as securities by SEC
    $ 2,298,240
      (a)

    Percentage
    of Total Assets
      27 %
      =(a)/(b)

    Securities and Exchange Commission

Division of Corporation Finance

Office of Crypto Assets

Page 3

January 31, 2024

    Calculation
    of total Assets excluding cash

    Crypto
    assets/currencies
      948

    Investments,
    at value (Cost $100,000)
      100,000

    Staked
    crypto assets/currencies
      8,185,089

    Prepaid
    expense
      175,395

    Property
    and equipment, net
      8,834

    Total
    Assets excluding cash
    $ 8,470,266
    (b)

Business

Our
Business, page 3

4. Refer
                                            to your response to prior comment 11. In future filings, please include a more detailed description
                                            of the nature of your staking services, including the specifics of how the staking process
                                            operates on StateSeeker’s Stake Hub. In this regard, we note your disclosure on page
                                            3 that “StakeSeeker’s Stake Hub is central to BTCS’s growth strategy, allowing
                                            users to Delegate their crypto assets to the Company’s validator nodes.” Disclose
                                            how the arrangements with users of the platform are structured, and clarify whether your
                                            platform only allows users to stake or delegate their crypto assets to your validator nodes
                                            or if the platform allows users to stake to third-party validators using Stake Hub. In this
                                            regard, we note your response to comment 17 in which you say that “crypto asset holders
                                            can delegate to validator nodes not operated by the Company and sign up for StakeSeeker to
                                            utilize [y]our software.” Also, in future filings, please include the Token Rewards
                                            Production table you include in response to comment 26. To the extent that you do not earn
                                            revenues from certain users or for certain services, so state in future filings. In this
                                            regard, we note your response to comment 9 that “BTCS operates the StakeSeeker platform,
                                            which is currently a free-to-use personal finance software and informational website.”

Response:

The
Company acknowledges the Staff’s comment and in future filings will include the expanded disclosure to substantially in the form
below.

“The
Company’s internally-developed “StakeSeeker” platform is a personal finance software and education center with a comprehensive
crypto dashboard for crypto asset holders to connect, monitor, track, and analyze their crypto portfolios across exchanges and wallets
in a single analytics platform. The StakeSeeker dashboard reads user data from digital wallets and utilizes application programming interfaces
(APIs) to read data from crypto exchanges and does not allow for the trading or custody of crypto assets. StakeSeeker’s Stake Hub
functions as an educational center, offering users guidance on the delegation of their crypto assets to our non-custodial validator nodes,
along with the ability to monitor such delegation activities through data analysis. StakeSeeker does not provide or facilitate direct,
asset delegation or transaction execution on our platform. Stake Hub’s primary role is to offer instructional support and tracking
capabilities. There is no active process for asset delegation through the Stake Hub dashboard; it is primarily a monitoring tool. Crypto
asset holders are able to delegate to our validator nodes without signing up for the StakeSeeker platform; conversely, crypto asset holders
can delegate to validator nodes not operated by the Company and sign up for StakeSeeker to utilize our software. The StakeSeeker platform
is currently free-to-use for registered users, and as such does not currently generate any revenue. The Company is not a broker-dealer
or an investment advisor and does not provide any such related services.”

Refer
to tables presented in response to Comments #12 and #13 for details of the Token Rewards Production table which we plan to incorporate
in future filings under the “Company Overview” section of MD&A.

5. Refer
                                            to your response to prior comment 14. In future filings, please clarify that you self-custody
                                            your crypto assets, disclose what portion of your crypto assets you hold in hot wallets and
                                            cold wallets, whether you hold your private keys in cold storage and whether you have insurance
                                            that covers the loss of your crypto assets. In this regard, we note the first and second
                                            risk factors on page 28.

Response:

We
plan to enhance our disclosure around our custody procedures regarding our crypto assets in future filings in consideration of the Staff’s
comments. Our enhanced disclosure will supplement previous disclosure and will include disclosure substantially in the form below:

“BTCS
prioritizes self-custody of its crypto assets through secure storage of the majority of its crypto assets in cold digital wallets, with
the goal of typically maintaining less than 0.1% of its crypto assets on crypto exchanges at any given time, except during necessary
transfers between wallets and exchanges for sales or purchases. Occasionally, we may use hot wallets or move crypto assets to exchanges
for operational or transactional requirements. Additionally, we regularly transfer crypto assets to more secure cold wallets when possible.
As of December 31, 2023, [●]% of BTCS’s crypto assets were held in cold storage wallets and [●]% of crypto
assets were held in other storage wallets.

    Securities and Exchange Commission

Division of Corporation Finance

Office of Crypto Assets

Page 4

January 31, 2024

The
Company currently does not maintain any insurance policies that provide coverage for potential losses of crypto assets in cases of theft,
lost keys, or any other events that might lead to the loss of private keys or crypto assets held within our secure digital wallets.

Our
cold wallet private keys are protected through a variety of methods, including key sharding, key encryption, and offline encrypted key
storage in safety deposit boxes situated across multiple geographic locations. This multi-layered approach ensures the utmost security
for our crypto assets.”

6. Refer
                                            to your response to prior comment 17. In future filings, please disclose how you calculate
                                            the estimated staking rewards that you include on your platform.

Response:

The
Company acknowledges the Staff’s comment and in future filings will include the expanded disclosure substantially in the form below.

“The
estimated staking rewards, expressed as the Annual Percentage Reward (APR), as displayed on StakeSeeker’s Stake Hub and our StakeSeeker
website (www.stakeseeker.com), are determined using the most recent network data obtained through API data pulls from www.stakingrewards.com,
a reputable and leading third-party blockchain data provider. To ensure accuracy and consistency, BTCS conducts periodic checks to validate
the APR data obtained against the data reported on each respective blockchain network’s blockchain explorer. Footnotes on StakeSeeker’s
Stake Hub and website state that the APR presented is not guaranteed and does not include StakeSeeker’s validator fee. The figures
are provided for informational purposes and are subject to change based on the dynamics of the underlying blockchain networks.”

7. Refer
                                            to your response to prior comment 22. Please revise to disclose the functionality of Stake
                                            Hub on your Stateseeker platform. In addition please describe your policies and procedures
                                            for ensuring that your business operations are in compliance with the federal securities
                                            laws related to the decision to add functions, services and crypto assets to your crypto
                                            asset platform.

Response:

Refer
to enhanced disclosures surrounding StakeSeeker in responses to comment #4 and #6 above. We would like to draw your attention specifically
to the disclosure language that states, “StakeSeeker does not provide or facilitate direct, asset delegation or transaction
execution on our platform. Stake Hub’s primary role is to offer instructional support and tracking capabilities. There is no active
process for asset delegation through the Stake Hub dashboard; it is primarily a monitoring tool.”

We
believe that our disclosures effectively convey that StakeSeeker is a free-to-use dashboard designed exclusively for monitoring crypto
asset holdings and transactions. Therefore, the additional monitoring capabilities for crypto assets do not i