The fund is closed. All remaining shares have been bought back. This thread is for reference only.

This post is a summary. A copy of the prospectus can be found here: https://docs.google.com/document/d/18ZVDjRMGSiEWH6TTHmrLhT-z0clZLVP87w4fZMB1ZdU/edit.

Highlights:

• Shares each represent 1/100th of a troy oz. of gold (initially).
• Shares can be redeemed for physical gold bullion (in 1 oz. units).
• Shares normally trade at the spot price, but can be higher or lower.
• The fund strives to maintain liquidity and price stability (relative to the spot price).

The Bitcoin Gold Trust is an exchange-traded fund listed on the Bitcoin Trading Corp. Exchange. The trust holds physical gold bullion and issues shares representing its holdings. The purpose of the trust is to provide a way in invest in gold through bitcoin without the inconvenience of holding physical gold bullion.

The objective of the trust is for the value of the shares to reflect the price of gold owned by the trust, less the trust’s expenses and liabilities. The trust receives gold in exchange for shares and delivers gold in exchange for redeemed shares. The ability to exchange of gold for shares is what maintains the nominal value of the shares at the value of the gold that they represent. The trust is not actively managed and does not engage in activities designed to profit from changes in the price of gold.

With the exception of cash held to pay expenses and facilitate operations, the fund invests exclusively in physical gold bullion. The gold is unencumbered, fully allocated, and will never be borrowed, lent, or used as collateral. It is stored in a vault at Wells Fargo and is audited periodically. The initial value of a share is 1/100th of a troy oz. of gold, though fees will reduce that value over time (see below). Regardless of the nominal value, shares can trade at a premium or a discount to that value.

The trust does not intend to pay dividends or cash distributions.

The trust issues and redeems "baskets" of shares on a continuous basis (a basket equals the equivalent of 1 troy ounce of gold in shares). A 5% fee is charged for redeeming a basket of shares. The person redeeming the shares is also responsible for paying shipping and insurance costs. Persons may redeem fractions of a basket at the discretion of the sponsor, but the fee may be substantially higher.

The size of the initial offering will be 100 shares, or 1 troy oz. of gold, but the number of shares can grow as more gold is deposited into the trust.

The only ordinary expenses paid by the trust is a fee of 1% per year paid to the sponsor. The fee is paid issuing an appropriate number of additional shares and assigning them to the sponsor, so the amount of gold that a share represents will slowly decrease from the initial 1/100th ounce. The sponsor currently agrees to waive the fee.

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.

Bid and ask walls will be maintained at approximately +/- 5% of the spot price in order to ensure liquidity. There will always be shares to buy at a reasonable price and shares can always be sold at a reasonable price.

The finances of the trust are listed here and are updated periodically:  https://docs.google.com/spreadsheet/ccc?key=0Am3m7aRNI-JbdHB4RE1fcDktUmdnSDJpZnpVdG0xY2c

A picture of the assets can be found here: https://docs.google.com/file/d/0B23m7aRNI-JbSXNOeGhPUUhhSVk/edit?usp=sharing

Thanks for the suggestions. LTC-GLOBAL shareholders can change their vote as often as they like, but I don't think there is a reasonable way to pass on that ability. Using motions to vote indirectly is a little bit of a hack, but I think it can still provide some value.

I like the idea of the on-going motions, except for the part where I have to monitor them. What I can do as a compromise is to extend the motion to two weeks and update the approval vote during that period, and then afterward allow shareholders to request a motion to re-vote if the contract changes.

I can use the public comment feature to show how the vote was cast.

For now, I am going to stick with the 100 vote margin. It is simpler and it already happens to be 10% of the outstanding shares (though that number can change).

More information on voting.

When a new security is submitted for approval, the fund manager will submit a motion to shareholders to vote on approval of the security. The voting will close in 5 days. As stated above, the fund will only vote as long as the motion passes or fails by a margin of at least 100 shares. Shares owned by the fund or fund manager will not participate in the motion.

When the fund obtained the LITECOIN_GLOBAL shares that it holds, it gained the right to vote on approval all of the securities listed on the exchange (not just the ones currently awaiting approval). This means that shareholders of BTC-TRADING-PT will be able to vote on motions to approve these securities. However, since there is no urgency (as they have already been approved), the fund manager will submit motions for only a few of these at a time, starting with the most recently listed.

Unless there is strong objection by shareholders, the fund manager will begin submitting motions for approving securities once 500 shares are owned by the public. Since the fund only gets one chance to vote, this will make the vote available to more people, although it will prevent participation of the fund in the approval process for some securities currently awaiting approval. Waiting for more shares to be sold will also help to ensure that the votes are not dominated by a single person.

BTC-TRADING-PT is now trading. There are currently 1000 shares outstanding and I will initially be posting asks of 100 shares at a time at the average of LTC-GLOBAL's bid and ask prices until a market develops. If you want to buy shares and none are available, send me an email or PM.

Sunday, December 23, 2012

Overview

Assets: 1 oz.
Shares Outstanding: 1000
NAV: 21.3372 LTC
Basket Size: 1000 shares

Commentary

It may be just a coincidence, but the values of gold and Litecoin have been strongly correlated for a few weeks now. The NAV has been very flat. Last week the NAV dropped  a little (mostly on Friday) from 22.0 LTC to 21.3 LTC (-3.2%), with the price of LTC remaining steady, going from $0.0772 to 0.0774 (+0.3%), and a small drop in the price of gold from $1696 to $1652 (-2.6%).

Maintained for documentation purposes:

The BTC Trading Pass-Through Fund (BTC-TRADING-PT) is an exchange-traded fund that trades on the BTC Trading Corp exchange. The fund holds shares of BTC Trading Corp (LTC-GLOBAL) and issues its own shares that represent the assets held by the fund. LTC-GLOBAL shares are traded on the LTC-GLOBAL exchange and are denominated entirely in LTC. This fund enables investors to effectively own and trade shares of BTC Trading Corp denominated in BTC, as well as to receive dividends from LTC-GLOBAL denominated in BTC.

Each share of BTC-TRADING-PT represents 1/10th of a share of LTC-GLOBAL. Shares do not represent ownership of the fund or ownership of John Galt Asset Management. Shares of BTC-TRADING-PT are issued only for shares of LTC-GLOBAL actually held by the fund.

The fund accumulates dividends paid by LTC-GLOBAL, converts them to BTC, and distributes the proceeds (less fees) to shareholders once per month. Details are explained below.

Highlights

• Shares represent 1/10th of a share of LTC-GLOBAL
• Shares are traded on the BTC-TC exchange and are denominated in BTC.
• Shares can be redeemed for shares of LTC-GLOBAL, and vice-versa.
• Shares normally trade at 1/10th of the current price of LTC-GLOBAL but can be higher or lower.
• Shareholders have limited LTC-GLOBAL voting rights.

LTC-GLOBAL Voting Rights

Shares of LTC-GLOBAL grants the shareholders special voting rights. While these rights are granted to John Galt, an effort to extend and transfer limited rights to shareholders of BTC-TRADING-PT is made.

Voting on LTC-GLOBAL motions: When feasible, an identical motion will be filed for the BTC-TRADING-PT security and shareholders may vote on the motion. The outcome of the motion determines how the fund manager votes in the actual motion. If this is not feasible, the fund manager may vote according to its own interests.

Voting on new security listings: Ownership of LTC-GLOBAL shares grants shareholders the right to approve new securities on the LTC-GLOBAL and BTC-TC exchanges. This right is extended to shareholders of BTC-TRADING-PT in a limited way. Whenever a new security is listed, a motion will be filed allowing shareholders to vote to approve the new security. At least 200 shares must vote YES or NO for the motion to be considered valid. If the motion passes or fails by at least 100 shares, then the fund manager will vote according to the outcome of the motion. The voting will close in 5 days for IPOs and 7 days for existing securities. Shares of the fund owned by John Galt or the fund will not participate in the motion.

Dividends

BTC-TRADING-PT normally receives a dividend once per month from the LTC-GLOBAL shares it holds. It is typically paid after the end of the month. The monthly management fee is deducted from the proceeds and paid to the fund manager. The remaining proceeds are converted to BTC and distributed to BTC-TRADING-PT shareholders within 5 business days of receiving the dividend from LTC-GLOBAL.

Fees

John Galt charges a normal fee of 1% of the value of the assets per year, paid as 1/12 of 1% each month based on the value at the time of payment. The fee is deducted from the fund's income, and any amount that exceeds the income for the month is waived.

Redeeming shares

Shares of BTC-TRADING-PT can be redeemed for shares of LTC-GLOBAL. Please contact John Galt Asset Management at the email address above, or by sending a PM to "John Galt" on the LitecoinTalk forums (http://forum.litecoin.net/) or "JohnGalt" (note the missing space) on the BitcoinTalk forums.

• Shares are redeemed in multiples of 10. Each 10 shares of BTC-TRADING-PT is redeemed for one share of LTC-GLOBAL. The minimum number of BTC-TRADING-PT shares that can be redeemed is 100. The person redeeming the shares must have an account on the LTC-GLOBAL exchange in order to receive the LTC-GLOBAL shares.
• There is a redemption fee of 1% based on the value of the shares redeemed, payable in BTC or LTC to John Galt Asset Management.
• The LTC-GLOBAL shares are transferred as soon as the BTC-TRADING-PT shares have been transferred and the fee has been paid.

Depositing shares

• 10 shares of BTC-TRADING-PT are issued for each share of LTC-GLOBAL. The minimum number of LTC-GLOBAL shares is 10.
• There is a redemption fee of 1% based on the value of the shares deposited, payable in BTC or LTC to John Galt Asset Management.
• The BTC-TRADING-PT shares are transferred to the depositor as soon as the LTC-GLOBAL shares have been transferred and the fee has been paid. The depositor must have an account on the BTC-TC exchange in order to receive the shares.

Current Financial Information

Detailed information about the financial state of the fund, including a description of the assets, the number of shares issued, and the NAV, can be found in this spreadsheet:

https://docs.google.com/spreadsheet/ccc?key=0Am3m7aRNI-JbdElvTTc5Vmg3bUh2WDAwc2tsLU1JcEE

The fund's assets can be viewed on this page: https://litecoinglobal.com/portfolio/gbw4

If the fund closes

John Galt reserves the right to close the fund for any reason after giving 30 days notice. The management fee is waived during this period. All assets of the fund, including undistributed dividends, will be distributed to shareholders after the end of the 30 day period.

Shareholders can choose how to receive the distribution:
1. Multiples of 10 shares of the fund can be exchanged for the shares of LTC-GLOBAL that they represent. There is no minimum and no fee in this case.
2. All remaining shares of LTC-GLOBAL will be sold and the proceeds will be distributed to the remaining fund shares as a final dividend.

Acting as a Market Maker

John Galt intends to act as a market maker in order to improve liquidity by posting buy and sell orders simultaneously. In general, the bids and asks will be priced at the LTC-GLOBAL highest bid and lowest ask prices (approximately); however, the prices will be no closer than +/-5% of their average in order to reduce price and currency fluctuation risk and to avoid disrupting normal trading.

I have decided to list a gold ETF -- Bitcoin Gold Trust -- on the Bitcoin Trading Corp exchange. The symbol will be GOLD. This ETF works just like the Litecoin Gold Trust that I operate on the Litecoin Global exchange, except that shares are denominated in BTC. The two trusts are completely separate entities with their own assets. I would appreciate comments and feedback on this security.

This post is just a summary (despite its length). A copy of the prospectus can be found here: https://docs.google.com/document/d/18ZVDjRMGSiEWH6TTHmrLhT-z0clZLVP87w4fZMB1ZdU/edit.

TL;DR: This is very similar to GLD on the NYSE.

Highlights:

• Shares each represent 1/100th of a troy oz. of gold (initially).
• Shares can be redeemed for physical gold bullion (in 1 oz. units).
• Shares normally trade at the spot price, but can be higher or lower.
• The fund strives to maintain liquidity and price stability (relative to the spot price).

The Bitcoin Gold Trust is an exchange-traded fund listed on the Bitcoin Trading Corp. Exchange. The trust holds physical gold bullion and issues shares representing its holdings. The purpose of the trust is to provide a way in invest in gold through bitcoin without the inconvenience of holding physical gold bullion.

The objective of the trust is for the value of the shares to reflect the price of gold owned by the trust, less the trust’s expenses and liabilities. The trust receives gold in exchange for shares and delivers gold in exchange for redeemed shares. The ability to exchange of gold for shares is what maintains the nominal value of the shares at the value of the gold that they represent. The trust is not actively managed and does not engage in activities designed to profit from changes in the price of gold.

With the exception of cash held to pay expenses and facilitate operations, the fund invests exclusively in physical gold bullion. The gold is unencumbered, fully allocated, and will never be borrowed, lent, or used as collateral. It is stored in a vault at Wells Fargo and is audited periodically. The initial value of a share is 1/100th of a troy oz. of gold, though fees may reduce that value over time (see below). Regardless of the nominal value, shares can trade at a premium or a discount to that value.

The trust does not intend to pay dividends or cash distributions.

The trust issues and redeems "baskets" of shares on a continuous basis (a basket equals the equivalent of 1 troy ounce of gold in shares). A 5% fee is charged for redeeming a basket of shares. The person redeeming the shares is also responsible for paying shipping and insurance costs. Persons may redeem fractions of a basket at the discretion of the sponsor, but the fee may be substantially higher.

The size of the initial offering will be 100 shares, or 1 troy oz. of gold, but the number of shares can grow as more gold is deposited into the trust.

The only ordinary expenses paid by the trust is a fee of 1% per year paid to the sponsor. The fee is paid issuing an appropriate number of additional shares and assigning them to the sponsor, so the amount of gold that a share represents will slowly decrease from the initial 1/100th ounce. The sponsor currently agrees to waive the fee.

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.

Bid and ask walls will be maintained at  approximately +/- 5% of the spot price in order to ensure liquidity. There will always be shares to buy at a reasonable price and shares can always be sold at a reasonable price.

The finances of the trust are listed here and are updated periodically:  https://docs.google.com/spreadsheet/ccc?key=0Am3m7aRNI-JbdHB4RE1fcDktUmdnSDJpZnpVdG0xY2c

Saturday, December 15, 2012

Overview

Assets: 1 oz.
Shares Outstanding: 1000
NAV: 21.9841 LTC
Basket Size: 1000 shares

Commentary

Another slow week for LTC and gold. The NAV has risen slightly from 21.6 LTC to 22.0 LTC (+1.9%) with a small drop in the price of LTC, going from $0.0787 to $0.0772 (-1.9%), and an even smaller drop in the price of gold, going from $1702 to $1696 (-0.4%).

Sunday, December 9, 2012

Overview

Assets: 1 oz.
Shares Outstanding: 1000
NAV: 21.6205 LTC
Basket Size: 1000 shares

Commentary

This week was a slow week -- perhaps a refreshing change after the last several weeks of big changes in the prices of LTC and gold. The NAV has risen from 20.6 LTC to 21.6 LTC (+4.9%) due to a moderate drop in the price of LTC from $0.0837 to $0.0787 (-6.0%) offsetting a small drop in the price of gold from $1726 to $1702 (-1.4%).

Keep in mind that the NAV depends on the prices (in other currencies) of both gold and LTC. When the price of gold rises more than the value of LTC, the NAV rises, and vice versa. The amount of trade between gold and LTC is virtually nil, requiring the NAV to be calculated using dollars. The difference is small, although it might occasionally present some arbitrage opportunities.

Note: Weekly reports will no longer be posted in this thread. For the latest information on GOLD traded on LTC-GLOBAL, please look here: http://forum.litecoin.net/index.php/topic,780.0.html

This post is a summary. Please read the prospectus before investing. A copy of the prospectus can be found here: https://docs.google.com/document/d/1jwsxyjs1KQqeScAz__55BgIbkgRBRvCE71eHoz65hjo/edit.


Highlights:

• Shares each represent 1/1000th of a troy oz. of gold (initially).
• Shares can be redeemed for physical gold bullion (in 1 oz. units).
• Shares normally trade at the spot price, but can be higher or lower.
• The fund strives to maintain liquidity and price stability (relative to the spot price).

The Litecoin Gold Trust is an exchange-traded fund listed on the Litecoin Global Stock Exchange. The trust holds physical gold bullion and issues shares representing its holdings. The purpose of the trust is to provide a way in invest in gold through litecoin without the inconvenience of holding physical gold bullion.

The objective of the trust is for the value of the shares to reflect the price of gold owned by the trust, less the trust’s expenses and liabilities. The trust receives gold in exchange for shares and delivers gold in exchange for redeemed shares. The ability to exchange of gold for shares is what maintains the nominal value of the shares at the value of the gold that they represent. The trust is not actively managed and does not engage in activities designed to profit from changes in the price of gold.

With the exception of cash held to pay expenses and facilitate operations, the fund invests exclusively in physical gold bullion. The gold is unencumbered, fully allocated, and will never be borrowed, lent, or used as collateral. It is stored in a vault at Wells Fargo and is audited periodically. The initial value of a share is 1/1000th of a troy oz. of gold, though fees may reduce that value over time (see below). Regardless of the nominal value, shares can trade at a premium or a discount to that value.

The trust does not intend to pay dividends or cash distributions.

The trust issues and redeems "baskets" of shares on a continuous basis (a basket equals the equivalent of 1 troy ounce of gold in shares). A 5% fee is charged for redeeming a basket of shares. The person redeeming the shares is also responsible for paying shipping and insurance costs. Persons may redeem fractions of a basket at the discretion of the sponsor, but the fee may be substantially higher.

The size of the initial offering will be 1000 shares, or 1 troy oz. of gold.

The only ordinary expenses paid by the trust is a fee of 1% per year paid to the sponsor. The fee is paid issuing an appropriate number of additional shares and assigning them to the sponsor, so the amount of gold that a share represents will slowly decrease from the initial 1/1000th ounce. The sponsor currently agrees to waive the fee.

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 LTC.

Liquidity should not be a concern. Bid and ask walls will be maintained at  approximately +/- 5% of the spot price in order to ensure liquidity. There will always be shares to buy at a reasonable price and shares can always be sold at a reasonable price.

Assets of the trust are listed here and are updated periodically:  https://docs.google.com/spreadsheet/ccc?key=0Am3m7aRNI-JbdGhaT2RvWC1aeFFaSEMzMnE4OWkzMFE

A picture of the gold held by the trust can be seen here: https://docs.google.com/open?id=0B23m7aRNI-JbcC1RRXZhaEFvLUE
I appreciate any kind of feedback -- criticisms, comments, and suggestions.

Please refer to the new thread for further updates.

That is step 1 in the chart.

It's not magic. It is called "fractional reserve banking" and it works like this:

Bank A has $1.
Bank A loans $0.90 to a customer who buys from merchant B, who deposits the money in bank B. Merchant B believes he has $0.90.
Bank B loans $0.81 to a customer who buys from merchant C, who deposits the money at bank C. Merchant C believes he has $0.81.
Bank C loans $0.73 to a customer who buys from merchant D, who deposits the money at bank D. Merchant D believes he has $0.73.
Bank D loans $0.66 to a customer who buys from merchant E, who deposits the money at bank E. Merchant E believes he has $0.66.
Bank E loans $0.59 to a customer who buys from merchant F, who deposits the money at bank F. Merchant F believes he has $0.59.
Bank F loans $0.53 to a customer who buys from merchant G, who deposits the money at bank G. Merchant G believes he has $0.53.
Bank G loans $0.48 to a customer who buys from merchant H, who deposits the money at bank H. Merchant H believes he has $0.48.
Bank H loans $0.43 to a customer who buys from merchant I, who deposits the money at bank I. Merchant I believes he has $0.43.
Bank I loans $0.39 to a customer who buys from merchant J, who deposits the money at bank J. Merchant J believes he has $0.39.
...

In the end, there is actually only $1 split among a large number of banks, but each depositor believes that they have the amount that they deposited and the fact that the depositors can withdraw their deposits at any time confirms it (as long as all depositors don't withdraw at the same time). The total amount of deposits is $9, so even though there is only 1 physical dollar, there are 9 additional virtual dollars which are nearly indistinguishable from the original $1.

The chart is incomplete and inaccurate because the chain of bank deposits does not stop at 3. It goes on indefinitely. Also the reserve ratio is more like 10%, not 25%.

The result is this: for every $1 the Fed creates, banks loan (up to) 0.9¹ + 0.9² + 0.9³ + ... = $9

Currently, banks are not loaning at their limit. They have a lot of money deposited at the Fed earning interest. This is what is keeping inflation low even though the Fed is printing money. When the banks decide to start lending, the money supply will balloon and inflation will rise.

I watched a series of videos on Youtube where a guy was showing how he could turn a porch light on and off by walking underneath it. He did pretty well, although it wasn't perfect. Anyway, I timed the light and found that it turned on for 30 seconds and then off for 60 seconds every time, over and over. I guess he didn't realize that he had trained himself to walk under the light for 30 seconds and then walk away for 60 seconds.

Regarding your second graph. The price is still up at B when it should be down at C. Where did you go wrong?


Why do the call it Elliott Wave Theory? It's not really a theory. At best, it is speculation. Really, it is an textbook example of confirmation bias (look up "Street Light Interference"). It should be called Elliott's Cocaine Hallucination, or Elliott (Wouldn't It Be Great If The Whole Universe Could Be Condensed Into One Simple Equation?) Wave Theory, or Elliott Wave ... Hey There Are Fairies Dancing In My Garden!

Unless you can prove it wasn't a total coincidence, you really can't claim to have had any effect. A couple of weeks ago, I bought 10,000 LTC and it had no effect on the market at all as far as I can tell -- and LTC is far less liquid than BTC.

You don't have to start meaningless threads to achieve your 5 post goal. You can also reply to posts in other meaningless threads in order to reach your goal.

Have you posted in the BitInstant support thread at the top of this forum's page?