Topic: [BTC-TC] Bitcoin Gold Trust -- CLOSED (Read 10157 times)

Satuday, June 29, 2013

The fund is closed. All remaining shares have been bought back.

Sunday, June 23, 2013

Overview

Assets: 0.03 oz.
Shares Outstanding: 3
NAV: 0.1188

Reminder: The fund will close on Saturday June 29, 2013. All remaining shares will be bought back at the spot price of gold at the time of the closure.

Saturday, June 15, 2013

Overview

Assets: 0.03 oz.
Shares Outstanding: 3
NAV: 0.1364

Reminder: The fund will close on June 29, 2013. All remaining shares will be bought back at the spot price of gold at the time of the closure.

Saturday, June 8, 2013

Overview

Assets: 0.04 oz.
Shares Outstanding: 4
NAV: 0.1249

Saturday, June 1, 2013

Overview

Assets: 0.05 oz.
Shares Outstanding: 5
NAV: 0.1105

Monday, May 27, 2013

Overview

Assets: 0.05 oz.
Shares Outstanding: 5
NAV: 0.1075

Saturday, May 18, 2013

Overview

Assets: 0.05 oz.
Shares Outstanding: 5
NAV: 0.1143

Saturday, May 11, 2013

Overview

Assets: 0.05 oz.
Shares Outstanding: 5
NAV: 0.1179

After about 6 months of running the fund, I decided that it is not worth my time to continue running it and hoping that someday people will become interested. I was expecting the assets to exceed ten ounces of gold, but the fund never even came close to one ounce. If the situation changes in the future, I can start it up again.

I just looked over this investment.

Looks like it has been well run. The odd thing about it is the timing. I'm actually thinking that now and possibly for the next few weeks / months it might be useful to own gold or silver instead of BTCitcoin.

BTCitcoin is relatively high priced and gold or silver are relatively low priced.

Are you sure you want to (continue to) shut this down now?

-MikeMark

Monday, May 6, 2013

Overview

Assets: 0.05 oz.
Shares Outstanding: 5
NAV: 0.1563

Just to clarify, BTC-GOLD (my fund) is continuing operations as normal.

It is sad to see JohnGalt's fund, GOLD, go. But I can understand the situation.

Saturday, April 27, 2013

Overview

Assets: 0.06 oz.
Shares Outstanding: 6
NAV: 0.1107

You've done a great job running this issue.  It's sad to see it go.

I'm sorry to hear this John. To be honest I saw it coming and tried to get in with LTC-SILVER, but it looks like LTC-GLOBAL will stop the deal. If the process was a little more business-friendly i'd love to step in and take over for you and keep your shareholders happy but it looks like that is not an option for anything listed on BTC-TC.

Hopefully Carnth's funds can take the torch now, and continue your proud legacy.

I regret to inform shareholders and anyone else that may be interested that I have decided to close the fund. The reason is that the participation in the fund has been much too low to justify its existence. I am surprised that the interest in owning gold is so low, but I suppose that it just can't compete with bitcoin in terms of return on investment.

The fund will remain open until June 29. At that time I will do a forced buyback of any remaining shares at the spot price (of gold).

In the meantime:

• Shares can continue to be traded until June 29, or until I have bought back all remaining shares.
• I will buy back any shares at the current spot price. We must both be present to do this.
• I will buy any ask priced at or below the current spot price.
• I will continue to post a bid for the remaining shares at about 95% of the spot price.
• I will no longer accept gold deposits in exchange for shares.

If anyone is interested in buying the fund's gold (or any other gold), please send me an email or a PM.

If you have any concerns, questions, or comments, you can post them here or send me an email or a PM.

Sunday, April 21, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 100
NAV: 0.1222
Basket Size: 100 shares

Commentary

The price of gold fell sharply at the beginning of the week and ended up going from $1536 to $1405 (-8.5%). Meanwhile, the price of BTC has recovered some, rising from $79.20 to $114.98 (+45%). The result was a fall in the NAV from 0.1939 BTC to 0.1222 BTC (-37%), though it is still above the lows of two weeks ago.

Saturday, April 13, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 100
NAV: 0.1939
Basket Size: 100 shares

Commentary

In the past few months, the NAV of the fund has been dominated by the rapid rise in price of BTC. Last week was no exception; however, the tables were turned and the fund proved its value as the price of BTC crashed.

The price of gold rose slightly during the week, but ended the week with a small loss, falling from $1568 to $1536 (-2%). Meanwhile, the price of BTC surprised nobody by undergoing a major correction, plummeting 80% from a high of about $265 to a low of about $50. The entire week was only slightly less dramatic, falling from $138 to $79 (-43%). The result was a huge spike in the NAV, jumping from 0.1136 BTC to 0.1939 BTC (+70%).

In the commentary last week, I noted that there continues to be a benefit to owning gold, and this week was a perfect demonstration. Nobody knows what will happen next week.

I would also like to note that I have been forced to reduce my market-making activity during the last few days because the risk of loss has been too high due to the wild swings in the NAV. I reduced the sizes of my bids and asks (removing them completely at one point) and increased the spread. Unfortunately, the result of that has been a loss of liquidity when it is needed most. As the markets stabilize, I will restore the sizes of my bids and asks and reduce the spread.

Sunday, April 7, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 100
NAV: 0.1136
Basket Size: 100 shares

Commentary

Well, it was another week dominated by the rise in the value of BTC. Bitcoin has been the clear leader among all investments. Don't let this distort your perspective. There is nothing wrong with owning gold.

The price of BTC soared this week, going from $88.91 to $138 (+55%). Meanwhile, the price of gold fell sharply but recovered somewhat, dropping from $1598 to $1568 (-1.9%). As a result, the NAV fell from 0.1798 BTC to .1136 BTC (-37%).

Saturday, March 30, 2013

Overview

Assets: 1 oz.
Shares Outstanding: 100
NAV: 0.1798
Basket Size: 100 shares

Commentary

The rate of increase in the value of BTC slowed this week. Nevertheless, it still rose strongly from $72.00 to $88.91 (+23%). Meanwhile, the price of gold fell slightly from $1608 to $1598 (-0.6%). The result was a continuation of the decline of the NAV, falling from 0.2233 BTC to 0.1798 BTC (-19%).

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%).

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%).

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

The trust is run by John Bolton, Belmont, California, U.S.A. I will read and respond to PMs, emails to [email protected], and posts in this thread (and others).