Topic: [BTC-TC] Bitcoin Gold Trust -- CLOSED - page 2. (Read 10153 times)

Sunday, March 24, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 100
NAV: 0.2233
Basket Size: 100 shares

Commentary

The juggernaut known as bitcoin has resumed its incredible rise in value, this week going from $47.30 to $72.00 (+52.2%). The price of gold was woefully outgunned rising only slightly from $1596  to $1608 (+0.8%). The decline in the NAV resumed this week went, falling from 0.3373 BTC to 0.2233 BTC (-31.0%).

Sunday, March 17, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 100
NAV: 0.3373
Basket Size: 100 shares

Commentary

After the flash crash last week, BTC has risen back to the high 40's, rising from $43.39 to $47.30 (+9.0%). The price of gold was up slightly from $1582 to $1596 (+0.9%). The result was a decline in the NAV this week, falling from 0.3645 BTC to 0.3373 BTC (-7.5%).

Sunday, March 3, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 100
NAV: 0.4605
Basket Size: 100 shares

Commentary

Although the price of BTC seemed to pause at the end of the week, it still went from from $31.49 to $34.36 (+9.1%). The price of gold was a littlle volatile this week also, but ended up rising only slightly from $1576 to $1582 (+0.4%). The result was yet another decline in the NAV this week, falling from 0.5006 BTC to 0.4605 BTC (-8.0%).

Sunday, February 24, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 100
NAV: BTC 0.5006
Basket Size: 100 shares

Commentary

The continuing rise in the price of BTC, from $27.03 to the nosebleed price of $31.49 (+16.5%), combined with a small drop in the price of gold, from $1612 to $1576 (-2.2%), has resulted in another dramatic decline in the NAV this week, falling from from BTC 0.5965 to BTC 0.5006 (-16.1%). It remains to be seen how long this swiftly rising price of BTC can be sustained. Gold has not performed well for while, now. Perhaps a recovery is due.

Sunday, February 17, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 100
NAV: BTC 0.5965
Basket Size: 100 shares

Commentary

The combination of the skyrocketing price of BTC, from $22.43 to $27.03 (+20.5%), and a moderate fall in the price of gold, from $1668 to $1612 (-3.4%), has resulted in a dramatic decline in the NAV this week, falling from from BTC 0.7437 to BTC 0.5965 (-19.8%).

I want everyone to know that I accidentally tried to sell a bar that was part of the assets of the Trust. This was completely unintentional. I bought the bar along with another bar (for myself) several months ago, and the wrong bar was placed in the Trust's storage. At no time was there any risk of loss to the Trust. The situation has been corrected.

I sincerely apologize to everyone for the mix-up. I have now begun recording the serial numbers of the bars in order to help prevent this from happening again.

Below is a picture of both bars. The one on the left (B052203) belongs to the Trust. The one on the right (B041851) is mine.

Carrying on like that! You'll get me fired or something.

Yes. You are correct. I was accidentally trying to sell the bar that is owned by the fund. It was a mistake. I have several bars and they must have been mixed up at some point (long ago). I have cancelled the sale. Tomorrow, I will straighten things out and show that there are indeed two separate bars.

Thanks for catching this, Usagi. Thanks for your acerbic wit, EskimoBob. And thanks for being pleasant, MPOE-PR.

Now that's a problem. Let's see what the man has to say.

Yes, in fact, you may be suprised to learn that there are actually more than two one ounce gold bars.


It's in his contract: https://btct.co/security/GOLD

Scroll down and you will see: https://docs.google.com/open?id=0B23m7aRNI-JbT0xhcEZFWFdQZVE

Serial number is the same as the one he's selling in the goods forum.

Ouch. Real world assets have serious trouble keeping up with BTC assets.


It is conceivable that two different one ounce gold bars exist. But it's a good point that people purporting to offer precious metals investments should state the serials of the backing where practical - which I don't see here anywhere.

Di you received a W.Fargo postcard like this?

If not, no need to panic...

...it will arrive soon.
Relax, this is just a joke.

Hi John just saw your sale of the 1oz pamp bar, SN B052203, what's going on here? This is the same bar you're backing GOLD with (from your contract,
"An up-to-date verification of the assets owned by the trust can be found here:
https://docs.google.com/open?id=0B23m7aRNI-JbT0xhcEZFWFdQZVE").

Your contract states the gold in the fund will remain unencumbered (etc.) and further that it is stored in a vault at Wells Fargo. I might be getting the wrong idea here so can you please explain what is going on with this sale? Thanks.

Saturday, February 9, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 100
NAV: BTC0.7437
Basket Size: 100 shares

Commentary

Despite a sharp drop in the price of BTC at the end of last week, the price quickly recovered and continued to rise. As a result, the NAV has declined, falling from from BTC0.7835 to BTC0.7437 (-5.1%). The price of BTC rose from $21.30 to $22.43 (+5.3%), accompanied by a negligible fall in the price of gold from $1669 from $1668 (<0.1%).

In the past, strong runs in the price of BTC have lead to sharp pull-backs. I can't predict what will happen, but if a pull-back happens again, you don't want to be holding BTC.

Sunday, February 3, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 100
NAV: BTC0.7835
Basket Size: 100 shares

Commentary

Under relentless pressure of a rising BTC, the NAV has continued its decline, falling from from BTC0.9651 to BTC0.7835 (-18.8%). This is primarily due to the spectacular post-bubble rise in the price of BTC from $17.20 to $21.30 (+23.8%), overwhelming a small increase in the price of gold from $1660 from $1669 (+0.5%).

Important Notice: Litecoin Gold Trust, the LTC-GLOBAL gold fund also managed by John Galt Asset Management, is changing its ticker symbol to GOLD. The change has no material effect on this fund. Both  funds continue to be separate entities with their own assets and shares. The purpose of changing the ticker is to improve the brand and prevent any conflict that might be caused if someone else took the ticker.

Sunday, January 27, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 100
NAV: BTC0.9651
Basket Size: 100 shares

Commentary

This week, despite the popping of the BTC bubble, the NAV has continued its decline, falling from from BTC1.06 to BTC0.9651 (-9.0%). This is due to an overall rise in the price of BTC (despite the bubble) from $15.91 to $17.20 (+8.1%), accompanied by a small drop in the price of gold to $1660 from $1689 (-1.7%).

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 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).

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%).