SecProbe.io

CORRESP
1
filename1.htm

January
25, 2024
    Peter
J. Shea

Peter.Shea@klgates.com

Via
EDGAR
    T
+1 212 536 3988

F +1 212 536 3901

U.S.
Securities and Exchange Commission

Division
of Corporation Finance

Office
of Crypto Assets

100
F Street, N.E.

Washington,
DC 20549

    Re:
    Tidal
    Commodities Trust I (File No. 333-276254)

    Hashdex
    Bitcoin ETF

    Amendment
    No. 3 to Registration Statement on Form S-1 & Comment Response

Dear
Ladies and Gentlemen:

On
behalf of our client, Tidal Commodities Trust I, a Delaware statutory trust (the “Registrant”), which will operate,
as a separate series of the Registrant, the Hashdex Bitcoin ETF (the “Fund”), we are submitting together with this
correspondence Pre-Effective Amendment No. 3 (“Amendment”) to the Registrant’s registration statement on Form
S-1 (“Registration Statement”) (File No. 333-276254). The Amendment and this correspondence provide the Registrant’s
responses to comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”)
presented in the Staff’s comment letter dated January 17, 2024 (“Comment Letter”), addressing Pre-Effective
Amendment No. 2 to the Registration Statement that was filed by the Registrant on January 10, 2024.

Each
of the Staff’s comments from the Comment Letter is repeated below in italics and followed by the Registrant’s response. Capitalized
terms used, but not defined, herein are used with the same meaning given to them in the Amendment. Any disclosure changes made in response
to the Staff’s comments, as set forth below, in one place are also made in other applicable places of the prospectus contained
in the Amendment.

Amendment
No. 2 to Registration Statement on Form S-1

General

 1. We
                                            note that you issued a press release on January 10, 2024 related to the offering contemplated
                                            by this registration statement. We also note that you issued a second press release on January
                                            11, 2024 to correct the first press release by stating that the Fund presently does not hold
                                            spot bitcoin in its portfolio. Please provide us with your analysis of these press releases
                                            under the federal securities laws, including whether they constitute written offers related
                                            to the securities included in this registration statement. Please note that we may have additional
                                            comments following our review of your response.

    K&L
    Gates LLP

    599
    Lexington Avenue New York NY 10022-6030

    T
    +1 212 536 3900 F +1 212 536 3901 klgates.com

RESPONSE:

On
behalf of the Registrant, we have cooperated with the Staff in responding to its questions regarding this issue. As you know, the Staff
made an oral request to me at approximately 1:15 p.m. (Eastern Time) on January 11, 2024, asking that the Digital Asset Adviser and the
Sponsor issue a correction to the joint press release of the Digital Asset Adviser and the Sponsor issued at 5:56 p.m. (Eastern Time)
on January 10, 2024 (the “January 10th Release”). This request was based on the premise expressed by the
Staff that the January 10th Release may have caused possible confusion in the financial press and the markets. According to
the Staff, this included confusion as to whether the Hashdex Bitcoin Futures ETF (the “Futures ETF”) could hold spot
bitcoin at that time and whether the change of the Futures ETF name to that of the Fund and the adoption of the spot strategy as described
in the Amendment had already taken place.

Although
we are mindful of the Staff’s concerns and questions, we strongly disagree with the premise that the January 10th Release
was either inaccurate or had caused confusion. In particular we note that the January 10th Release stated that for more information
about the Fund to click on a link, which would take the reader to the correct webpage of the Futures ETF that contained the current prospectus
of the currently effective registered offering by the Futures ETF under a registration statement on Form S-1 (File No. 333-273364) (the
“Futures ETF Offering”).

Nevertheless,
the Digital Asset Adviser and the Sponsor, out of an abundance of caution and with due regard for the Staff’s concerns, promptly
removed the January 10th Release from the Fund’s website and immediately took down an X (f/k/a Twitter) posting linking
to the January 10th Press Release before 1:30 p.m. on January 11, 2024. Further, the Digital Asset Adviser and the Sponsor
issued the requested corrective joint press release at 3:34 p.m. (Eastern Time) on January 11, 2024 (the “January 11th
Release”, and together with the January 10th Release, the “Press Releases”). The January
11th Release was subsequently filed by the Registrant under Form 8-K on January 11, 2024.

In
further response to the Staff’s comment above, our analysis under the federal securities laws concludes that January 10th
Release and the January 11th Release, whether considered singly or in combination, do not constitute written offers
related to securities included in the Registration Statement within the meaning of Section 2(a)(10) of the Securities Act of 1933. We
further note that the Press Releases contain accurate information. Rather, the Press Releases are properly viewed as part of the Futures
ETF Offering. In furtherance of the foregoing conclusion and in conjunction with our ongoing discussions with the Staff, the Registrant
filed on January 18, 2024, each of the Press Releases as free writing prospectuses (“FWP”) associated with the Futures
ETF Offering.

The
Offering

Inter-Series
Limitation on Liability, page 9

 2. Refer
                                            to your response to comment 9. Your revised disclosure page 9 that "a series will not
                                            be responsible for or affected by any liabilities or losses of or claims against any other
                                            series, except for non-recurring, unusual or extraordinary expenses" is inconsistent
                                            with your disclosure on page 10 that "[g]eneral expenses of the Trust will be allocated
                                            among the Fund and any future series of the Trust as determined by the Sponsor in its discretion."
                                            Please revise for consistency and clarity regarding which of the Trust's expenses may be
                                            allocated to the Fund and other series of the Trust. In this regard, we note your disclosure
                                            on pages 72 and 73 that states that the Sponsor, the Administrator, the Cash Custodian, the
                                            Transfer Agent, the Bitcoin Custodian, the Marketing Agent and the Digital Asset Adviser
                                            are indemnified by the Trust.

    2

RESPONSE:

The
prospectus contained in the Amendment (“Prospectus”) has been revised to clarify, as suggested, that a series will
not be responsible for or affected by any liabilities or losses of or claims against any other series, except for non-recurring, unusual
or extraordinary expenses, which include indemnification expenses of the Trust.

Fund
Expenses, page 10

 3. Refer
                                            to your response to comment 14. Your disclosure on pages 10, 27 and throughout that "[t]he
                                            Fund pays all of its non-recurring and unusual fees and expenses, if any, as determined by
                                            the Sponsor" and that "[n]on-recurring and unusual fees and expenses are unexpected
                                            or unusual in nature, such as legal claims and liabilities and litigation costs or indemnification
                                            or other unanticipated expenses" appears to be inconsistent with your disclosure on
                                            page 10 that "[t]he Trust may be required to indemnify the Sponsor, and the Trust and/or
                                            the Sponsor may be required to indemnify the Trustee, Marketing Agent or Administrator, under
                                            certain circumstances." Please revise for consistency and clarify the situations in
                                            which the Fund is responsible for indemnification expenses and the situations in which the
                                            Trust and/or the Sponsor is responsible for indemnification expenses.

RESPONSE:

The
suggested clarifications have been added where appropriate in the Prospectus.

Net
Asset Value, page 10

 4. Please
                                            revise your disclosure on page 10 to clarify, if true, that, to the extent FBSP methodology
                                            is unavailable, the value of the Fund's bitcoin will be determined by using the NQBTCS or
                                            will be fair valued in accordance with the policy approved by the Sponsor. In addition, please
                                            revise your disclosure on page 78 to describe the fair value policy approved by the Sponsor
                                            to determine the value of the Fund's bitcoin, and describe the criteria the Sponsor will
                                            use to determine that the FBSP calculation should not be used to value the Fund's bitcoin.

RESPONSE:

The
suggested revisions have been made where appropriate in the Prospectus.

What
Are The Risk Factors Involved With An Investment In The Fund

Risks
Related to Bitcoin and the Bitcoin Network

"Forks"
in the Bitcoin Network could have adverse effects, page 13

 5. Refer
                                            to your response to comment 2. We note your disclosure on pages 13 and 67 that "any
                                            decisions or actions related to airdrops or forks involving the Fund’s assets will
                                            align with the guidelines set forth by the CME" and your disclosure on page 79 that
                                            "[t]he valuation policies of the Fund address potential for a blockchain for a crypto
                                            asset to diverge into different paths and airdrops." Please revise these statements
                                            to clarify that respect to any fork, airdrop or similar event, the Sponsor will cause the
                                            Fund to irrevocably abandon the Incidental Rights or IR Currency and that the only crypto
                                            asset to be held by the Fund will be bitcoin.

    3

RESPONSE:

The
suggested clarification has been added.

The
Fund's Service Providers

Contractual
Arrangements with the Sponsor and Third-Party Service Providers

Sponsor,
page 72

 6. Refer
                                            to your response to comment 20. Your disclosure that pursuant to the Trust Agreement the
                                            "[S]hareholders shall have the right to vote on any amendment (i) if expressly required
                                            under Delaware or federal law or regulations or rules of any exchange, (ii) submitted to
                                            them by the Sponsor in its sole discretion, or (iii) if it would impair the right of a Shareholders
                                            to surrender baskets of Shares and receive the amount of Trust property represented"
                                            is inconsistent with your disclosure on pages 6 and 85 that "Shareholders representing
                                            at least a majority (over 50%) of the outstanding Shares of the Trust, voting together as
                                            a single class . . . may vote to (i) continue the Trust by electing a successor Sponsor .
                                            . . , and (ii) approve amendments to the Trust Agreement that impair the right to surrender
                                            Redemption Baskets for redemption" and " that [S]hareholders holding Shares representing
                                            seventy-five percent (75%) of the outstanding Shares of the Trust, voting together as a single
                                            class . . . may vote to dissolve the Trust upon not less than ninety (90) days’ notice
                                            to the Sponsor." Please revise for clarity and consistency.

RESPONSE:

The
Prospectus has been revised for clarity and the avoidance of inconsistencies by removing the discussion of shareholder voting rights
from the “Fund’s Service Providers” section and adding a cross reference to the section captioned “OPERATION
OF THE FUND - Trust Agreement”.

 7. Refer
                                            to your response to comment 20. Your revised disclosure on page 72 that [S]hareholders shall
                                            have the right to vote on any amendment . . . "[i]f it would impair the right of Shareholders
                                            to surrender baskets of Shares and receive the amount of Trust property represented"
                                            is inconsistent with your disclosure throughout that only Authorized Purchasers may redeem
                                            Shares. Please revise for clarity and consistency.

RESPONSE:

The
Prospectus has been revised to clarify, as suggested, by removing the discussion of shareholder voting rights and adding a cross reference
to the section captioned “OPERATION OF THE FUND - Trust Agreement”. See response to Comment No. 6 above.

Bitcoin
Custodian, page 73

 8. Refer
                                            to your response to comment 20. We note your revised disclosure on page 73 that "[t]he
                                            agreement obligated the Bitcoin Custodian to maintain insurance coverage." Please revise
                                            to clarify that the BitGo Custodial Services Agreement continues to obligate the Bitcoin
                                            Custodian to maintain insurance. In addition, please revise your disclosure to describe the
                                            limitations of liability pursuant to the agreement with the Bitcoin Custodian.

    4

RESPONSE:

The
revisions have been made as suggested.

Calculating
NAV

Valuation
of Bitcoin Futures Contracts, page 78

 9. Refer
                                            to your response to comment 22. We note your disclosure on page 78 that, when a Bitcoin Futures
                                            Contract has closed at its daily price fluctuation limit, the Sponsor will estimate the price
                                            at which its would be trading in the absence of the price fluctuation limit by reference
                                            to "exchange trade instruments at 4:00 p.m. E.T. on settlement day." Please revise
                                            to clarify what you mean by "exchange trade instruments" in this context. In addition,
                                            please revise to disclose here the daily settlement price that the CME publishes when the
                                            Bitcoin Future Contracts close at their price fluctuation limit for the day, and please revise