Saturday, January 19, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 100
NAV: BTC1.0615
Basket Size: 100 shares

Commentary

This week, the NAV has continued its decline, falling from from BTC1.16 to BTC1.06 (-8.5%). This is due another sharp rise in the price of BTC from $14.24 to $15.91 (+11.7%). The price of gold also rose a respectable amount over the same period from $1658 to $1689 (+1.9%), though not nearly matching the rise of BTC.

Saturday, January 19, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 1000
NAV: 27.1900 LTC
Basket Size: 1000 shares

Commentary

It has been a great week for LGT at the expense of LTC. This week the NAV has resumed its upward climb due primarily to the the continuing weakness in the value of LTC. The NAV has risen dramatically this week from 24.0 LTC to 27.2 LTC (+13.3%). While the price of gold has risen only slightly from $1658 to $1689 (+1.9%), the price of LTC has plunged  to $0.0621 from $0.0690 (-10.0%).

Saturday, January 12, 2013

Overview

Asset Information
Assets: 100 shares of LTC-GLOBAL
Shares Outstanding: 1000
NAV: BTC0.14719 (Based on the LTC-GLOBAL 7 day average price of 296.16 LTC)

Dividend Information
Weekly dividend: BTC0.02938
Weekly dividend (per share): BTC0.00002938 (paid on Tuesday)
Weekly Yield: 0.02%
Annualized Yield: 1.04%

Management Fee
Normal Fee (%0.02 of assets): 5.9232 LTC
Waived: 1.2558 LTC
Fee Paid: 4.6674 LTC

Detailed information can be found here: https://docs.google.com/spreadsheet/ccc?key=0Am3m7aRNI-JbdElvTTc5Vmg3bUh2WDAwc2tsLU1JcEE

Commentary

Strong demand for LTC-GLOBAL shares continued last week as the price has reached a new high of 343 LTC. Despite the rise in the average price of LTC-GLOBAL shares, the value of LTC relative to BTC continues to drop slowly. Still, the NAV rose strongly from BTC0.137 to BTC0.147 (+7.3%). The dividends paid this week were above average, the yield was 0.02% (1.04%, annualized).


Starting this week, I have begun posting motions for voting on approval of LTC-GLOBAL and BTC-TC securities. Each week, I plan to put up two issues from BTC-TC and three issues from LTC-GLOBAL until all existing securities have been voted on. Shareholders should have received notifications for motions to vote on the approval of the following securities. Voting closes next Saturday.

Ticker	Exchange
GSDPT	BTC-TC
MININGCO.ETF	BTC-TC
HASHING.MINING	LTC-GLOBAL
LHPOOL	LTC-GLOBAL
EMIF.LTC-TRADING	LTC-GLOBAL

Saturday, January 12, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 100
NAV: BTC1.1643
Basket Size: 100 shares

Commentary

This week, the NAV has continued its decline, falling from BTC1.24 to BTC1.16 (-6.5%). This is primarily due to the sharp rise in the price of BTC from $13.30 to $14.24 (+7.1%). The price of gold rose only slightly over the same period from $1648 to $1658 (+0.6%).

The value of investing in this fund

From time to time, people have questioned the value of investing in this fund, and also indirectly the value of investing in gold.

First, anyone but die-hard gold bugs and Keynesians will acknowledge that there are both pros and cons to investing in gold.

The main values of gold as an investment are as a hedge against the various forms of currency devaluation and as a way to lower risk through diversification.

• Gold is an asset, and as such, it is not devalued by inflation.
• Similarly, gold protects against the devaluation of fiat currencies. Because gold is traded globally in many currencies, if the value of a currency is lowered, the value of gold in that currency will rise proportionately.
• Gold is a currency of last resort. In a economic collapse, gold could retain its value (though it would be naive to think that it would be completely unaffected).
• Gold is a good diversification tool. The factors affecting the value of other assets are very different from those affecting the value of gold.

The downside to gold as an investment is primarily due its lack of utility beyond being a currency. Furthermore, its utility as a currency has also been diminished. As a result, gold is very speculative.

• Gold does not produce income.
• Gold has very little utility beyond being a currency.
• Over the very long term, the real value of gold has been constant, so its return on investment relative to other investments has been low.
  
• Gold is a speculative investment.

As for the value of this fund, first it must be emphasized that the value of this fund is determined primarily by the value of the gold that it holds.

The benefits of owning shares in this fund over owning physical gold have been repeated several times, but here they are again:

• Increased liquidity. Shares can be traded whenever the exchange is operating.
• Lower fees and overhead. Typically, buying and selling physical gold incurs steep premiums, especially when dealing in small amounts. The fees for trading shares of the trust are extremely low.
• A convenient way to accumulate gold bullion. A person can buy small numbers of shares over time, and then later exchange the shares for physical gold bullion.

Now, there are some drawbacks:

• Counter-party risk. There is a small risk that something might happen to the fund or the gold that the fund owns. This and other risks are fully explained in the prospectus.
• There is a management fee of 1% (which has been waived for the foreseeable future).

Saturday, January 12, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 1000
NAV: 24.0252 LTC
Basket Size: 1000 shares

Commentary

After the sharp rise in the NAV over the previous week due to the the drop in the value of LTC, the NAV has risen slightly this week from 23.7 LTC to 24.0 LTC (+1.3%). Both the prices of gold and LTC have changed only a little since last week, but both in a direction of a rising NAV. The price of LTC fell slightly from $0.0694 to $0.0690 (-0.6%) and the price of gold rose slightly from $1648 to $1658 (+0.6%).

The value of investing in this fund

From time to time, people have questioned the value of investing in this fund, and also indirectly the value of investing in gold.

First, anyone but die-hard gold bugs and Keynesians will acknowledge that there are both pros and cons to investing in gold.

The main values of gold as an investment are as a hedge against the various forms of currency devaluation and as a diversification of risk.

• Gold is an asset, and as such, it is not devalued by inflation.
• Similarly, gold protects against the devaluation of fiat currencies. Because gold is traded globally in many currencies, if the value of a currency is lowered, the value of gold in that currency will rise proportionately.
• Gold is a currency of last resort. In a economic collapse, gold could retain its value (though it would be naive that it would be completely unaffected).
• Gold is a good diversification tool. The factors affecting the value of other assets are very different from those affecting the value of gold.

The downside to gold as an investment is primarily due its lack of utility beyond being a currency. Furthermore, its utility as a currency has also been diminished. As a result, gold is very speculative.

• Gold does not produce income.
• Gold has very little utility beyond being a currency.
• Over the very long term, the real value of gold has been constant, so its return on investment relative to other investments has been low.
  
• Gold is a speculative investment.

As for the value of this fund, first it must be emphasized that the value of this fund is determined primarily by the value of the gold that it holds.

The benefits of owning shares in this fund over owning physical gold have been repeated several times, but here they are again:

• Increased liquidity. Shares can be traded whenever the exchange is operating.
• Lower fees and overhead. Typically, buying and selling physical gold incurs steep premiums, especially when dealing in small amounts. The fees for trading shares of the trust are extremely low.
• A convenient way to accumulate gold bullion. A person can buy small numbers of shares over time, and then later exchange the shares for physical gold bullion.

Now, there are some drawbacks:

• Counter-party risk. There is a small risk that something might happen to the fund or the gold that the fund owns. This and other risks are fully explained in the prospectus.
• There is a management fee of 1% (which has been waived for the foreseeable future).

Please weigh these pro and cons before judging the value of investing in this fund (or in gold).

I will sell you one of these arrowheads.

Saying this is a "significantly bad" investment is an exaggeration, of course. You are entitled to your opinion, but there are plenty of people in the world that would disagree. The SPDR Gold Trust (GLD) is the second largest ETF in the world, and Bitcoin Gold Trust is a bitcoin version of that fund.

As I posted above, the fund allows a person to invest in gold with the following benefits over owning physical gold:

• Increased liquidity. Shares can be traded whenever the exchange is operating.
• Lower fees and overhead. Typically, buying and selling physical gold incurs steep premiums, especially when dealing in small amounts. The fees for trading shares of the trust are extremely low.
• A convenient way to accumulate gold bullion. A person can buy small numbers of shares over time, and then later exchange the shares for physical gold bullion.
• A way to hedge against drops in the value of BTC.

If you don't like those benefits, then this investment is not for you.

Sunday, January 6, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 100
NAV: BTC1.2391
Basket Size: 100 shares

Commentary

Last week the NAV remained mostly flat, rising slightly from BTC1.23 to BTC1.24 (+0.8%), with the price of BTC dropping slightly from $13.45 to $13.30 (-1.1%) and the price of gold also dropping slightly from $1658 to $1648 (-0.6%).

Saturday, January 5, 2013

Overview

Asset Information
Assets: 100 shares of LTC-GLOBAL
Shares Outstanding: 1000
NAV: BTC0.13666 (Based on the LTC-GLOBAL 7 day average price of 260.8 LTC)

Dividend Information
Weekly dividend (per share): BTC0.00001805 (paid on Tuesday)
Weekly Yield: 0.01%
Annualized Yield: 0.69%

Management Fee: Waived

Detailed information can be found here: https://docs.google.com/spreadsheet/ccc?key=0Am3m7aRNI-JbdElvTTc5Vmg3bUh2WDAwc2tsLU1JcEE

Commentary

Strong demand for LTC-GLOBAL shares continued last week. Although prices didn't reach the previous week's high, volume increased and the trading range decreased as the average price rose. The dividends paid this week were average, so the yield has fallen back to 0.01% (0.69%, annualized). Despite the rise in the average price of LTC-GLOBAL shares, the value of LTC relative to BTC continues to drop slowly. As a result, the NAV rose only moderately from BTC0.134 to BTC0.137 (+2.2%).

Of the 1000 shares of BTC-TRADING-PT outstanding, over there are still many that have yet to be sold. Much of the problem has been due the to wide bid-ask spread along with the low voume. The spread is smaller now, but volume is still low.

This week, in order to get more shares into public hands I will fulfill bids that are at the 7 day average price for LTC-GLOBAL. I don't normally do this because it shuts out sellers, but I believe it is acceptable as there are currently very few sellers and there are several bidders. One possible way to take advantage of this action might be to buy BTC-TRADING-PT shares, exchange them for LTC-GLOBAL shares, and then list the LTC-GLOBAL shares at the higher ask price on LTC-GLOBAL.

Previously, I wrote that I would open up voting on new LTC-GLOBAL and BTC-TC securities when 500 shares have be sold to the public. That still remains; however, I plan to open up voting beginning next week regardless of the number of shares sold. There are now enough sold for a vote to win by a margin of 100 shares.

I sent a PM to cuz0882 today asking about the status of HYDRO.BONDS. He responded saying that he has received the shareholder list from GLBSE and asked for my email to see if I am on this list. Has anyone else been in contact with him? The HydroMining Bonds thread is locked and he has hasn't posted in months. I'm wondering if I was left out because I am not on his list for some reason.

This bug has been around for a long time, so you must be aware of it: the Total Vol and Market Cap columns on the Market page are all 0.

When it happens, it happens everywhere, but it looks like it is intermittent. Also, one time it occurred on all the non-bold BTC symbols. Sorry I'm not much help.

Saturday, January 5, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 1000
NAV: 23.7464 LTC
Basket Size: 1000 shares

Commentary

Last week the NAV jumped from 22.2 LTC to 23.7 LTC (+6.8%), due to the price of LTC dropping from $0.0748 to $0.0694 (-7.2%) compared to the small drop in the price of gold from $1658 to $1648 (-0.6%). As mentioned before, the steady drop in the value of LTC has highlighted the value of investing LTC in assets such as gold.


Edit: The NAV was incorrectly reported as 24.2073 LTC. It has been corrected.

Precious metal funds are very popular. The second largest ETF in the world is SPDR Gold Trust (GLD). There are a few reasons to invest in gold funds here (specifically GOLD on BTC-TC and LGT on LTC-GLOBAL):

• Increased liquidity. Shares can be traded whenever the exchange is operating.
• Lower fees and overhead. Typically, buying and selling physical gold incurs steep premiums, especially when dealing in small amounts. The fees for trading shares of the funds are extremely low.
• A convenient way to accumulate gold bullion. A person can periodically buy small numbers of shares, and then later exchange the shares for physical gold bullion.
• A way to hedge against drops in the values of LTC and/or BTC.

I will sell you 3 1/10th oz. silver rounds.

Sunday, December 30, 2012

Overview

Assets: 1 oz.
Shares Outstanding: 100
NAV: BTC1.2325
Basket Size: 100 shares

Commentary

Each week, I post current information about the fund as of the previous Friday afternoon. This is the first report. Although this week's report includes the entire week, please note that shares only began actively trading on Thursday.

Last week the NAV remained flat, rising slightly from BTC1.22 to BTC1.23 (+0.8%), with the price of BTC dropping slightly from $13.49 to $13.45 (-0.3%), compared to the small rise in the price of gold from $1652 to $1658 (+0.4%).

Sunday, December 30, 2012

Overview

Assets: 1 oz.
Shares Outstanding: 1000
NAV: 22.1591 LTC
Basket Size: 1000 shares

Commentary

Last week the NAV rose moderately from 21.3 LTC to 22.2 LTC (+4.2%), with the price of LTC dropping moderately from $0.0774 to $0.0748 (-3.4%), compared to the essentially unchanged price of gold going from $1652 to $1658 (+0.4%).

I am running Chrome 23.0.1271.97 m on windows 7.

Bold BTC symbol has a problem. There is always a box drawn to the right of it.




Speaking of bugs, perhaps it would be a good idea to have a way to report bugs from the site.

Saturday, December 29, 2012

Overview

Asset Information
Assets: 100 shares of LTC-GLOBAL
Shares Outstanding: 1000
NAV: BTC 0.13370 (Based on the LTC-GLOBAL 7 day average price of 237.47 LTC)

Dividend Information
Weekly dividend (per share): BTC 0.00010382 (paid on Tuesday)
Weekly Yield: 0.08%
Annualized Yield: 4.04%

Management Fee: 4.7494 LTC (0.02% of assets based on LTC-GLOBAL 7 day average price)

Detailed information can be found here: https://docs.google.com/spreadsheet/ccc?key=0Am3m7aRNI-JbdElvTTc5Vmg3bUh2WDAwc2tsLU1JcEE

Commentary

Strong demand for LTC-GLOBAL shares together with a limited supply has driven the price from about 200 LTC to 299 LTC. Meanwhile, the dividends paid this week were much higher than average (which probably spurred the demand for shares), so the yield has increased as well to 0.08% (4.04%, annualized).

Of the 1000 shares of BTC-TRADING-PT outstanding, over 200 have been sold in the first week. The dividend is scheduled for Tuesday at 00:00 UTC, so there is still time to buy shares and receive that dividend.