Topic: [LTC-GLOBAL] Litecoin Gold Trust -- Now Trading (Read 609 times)

It is by weight. One share represents 1/1000th oz. of gold, currently worth about 23 LTC.


Shares are traded just like any other shares on the Litecoin Global Stock Exchange. The shares are expected to always sell close to the price of gold because they can be exchanged for gold, but supply and demand determines the actual prices.

does the share represent a weight of gold or a litecoin value?

How does the trading of the shares work out?

Because you are a newbie I will give you some slack. Not everyone on these forums is a scammer. I assure you that this is completely legitimate. Just like any other "security" traded on the bitcoin and litecoin exchanges, you have to trust the operator. I have provided my real name and a photo showing that the gold does exist. If you go to the thread in the litecoin forums, you can see more. Posting identifying information in public on the internet is stupid. I don't do it. Depending on who you are and how much I trust you, I will provide more identification if you send me a PM.

I apologize for the wall of information in the previous post. It can be intimidating. This is an ETF, it is very similar to the SPDR Gold Shares ETF (GLD) that is traded on NYSE, except that it is much smaller (understatement of the year) and it is traded on the Litecoin Global Stock Exchange.

Here is the short explanation: each share represents a certain amount of gold and you trade the shares just like any other stock. The value of the shares follows the price of gold (in LTC) very closely, so it very much like trading the gold itself. This is a much easier and cheaper way to trade gold (albeit "paper" gold) compared to trading physical gold.

If you believe that something doesn't seem right, then I recommend that you keep reading all the information. I have explained everything in detail. In fact, I used the iShares Gold Trust prospectus as a template to ensure that everything is covered. If you have any questions, I am happy to answer them.

I was getting ready to up a bitcoin-based gold fund on GLBSE, but we all know how that story ended. Litecoin is not as popular as Bitcoin, but burnside has built a very nice Litecoin-based stock exchange, so I decided to switch over to Litecoin. I may decide to set up a bitcoin-based gold fund on Cryptostocks in the future.

What's the point of this? we send you litecoins and you show us a picture of the gold you can run off with? Great.

This is a brief 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.

Please note that the main thread for this security is on LitecoinTalk: http://forum.litecoin.net/index.php/topic,780.0.html


Highlights:

• Shares 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 near 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. At current prices and exchange rates, a share has a nominal value of approximately 23 LTC.

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

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).

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.