Company: DEFI
Filing Date: 2025-02-21
Form Type: POS AM
Source: 0001839882-25-010345
Chunk: 115

Company: Tidal Commodities Trust I
Filing Date: 2025-02-21
Form: POS AM
Chunk 115
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 to cover this decline. Alternatively, if
the Fund’s futures positions have increased in value, this increase will be credited to the Fund’s account.

The Fund’s Investments in Spot Bitcoin

The Fund’s investment strategy also
includes direct investments in bitcoin, commonly referred to as “spot bitcoin”. The Fund’s position in bitcoin
is purchased and sold through CME’s Exchange for Physical Transactions and is held by the Bitcoin Custodian on behalf of
the Fund.

Purchases and Sales of Spot Bitcoin

The Fund will, under normal market conditions,
frequently increase or decrease its holdings of physical bitcoin as Shares are created and redeemed. The Fund acquires and disposes
of physical bitcoin only through EFP transactions on the CME Bitcoin Futures Market, which take place under the regulatory oversight
of the CME, a CFTC-regulated market.

The Sponsor believes that by acquiring physical
Bitcoin through EFP transactions, the Fund will significantly mitigate the risk of fraud and manipulation. In using EFP transactions,
the Sponsor expects that the Fund will provide investors with bitcoin exposure that is more resistant to fraud and manipulative
practices than comparable products that seek to rely on unregulated trading platforms. In particular, to avoid any exposure to
potential manipulation from actors operating on unregulated trading platforms, although the Fund holds bitcoin, the Fund’s
NAV is calculated using a bitcoin price derived from the price of Bitcoin Futures Contracts, and the Fund purchases and sells bitcoin
exclusively via EFP transactions on the CME Bitcoin Futures Market. The Fund does not trade or otherwise rely on information or
services from unregulated spot bitcoin trading platforms, but instead buys Bitcoin Futures Contracts with the purpose of using
them to acquire physical bitcoin through EFP transactions.

However, despite being subject to CME’s
oversight, the Sponsor cannot assure investors that each and every transaction will be subject to a thorough analysis by the CME.
The Sponsor notes that this approach is less prone to being affected by would-be manipulators than other mechanisms that are not
reported to a regulated market, but it does not completely eliminate the risk of fraud.

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EFP Transactions are privately negotiated
trades between two parties that allow for the simultaneous transfer of a futures position for an equivalent spot market position,
or vice versa. The Fund does not intend to trade on unregulated bitcoin spot exchanges. All transfers relating to purchases or
sales of bitcoin are settled via “on-chain” transactions represented on the bitcoin blockchain. The Fund can