Saturday, December 1, 2012

Overview

Assets: 1 oz.
Shares Outstanding: 1000
NAV: 20.6215 LTC
Basket Size: 1000 shares

Commentary

This week was all about volatility, both in the price of gold and the price of LTC.

The big news was the halving of the Bitcoin block reward. While the halving had little effect on the price of BTC, it seemed to have a major effect on the price of LTC. The cause of this effect is unclear, but the correlation is unmistakable. The price of LTC and the total hash rate both began climbing steeply when the reward was halved. The price of LTC rose from $0.0608 last week to $0.0837 (+37.7%), occurring mostly in the two days following the halving.

The price of gold (in dollars) is about the same now as it was at this time last week, going from $1734 to $1726 (-0.46%). This small decline does not reveal the dramatic rise in price of gold last weekend to over $1750, followed by the long decline during the rest of the week to the current price of $1726.

The combination of a huge rise in the value of LTC with a mostly constant price of gold has resulted in a big decline in the NAV from 28.5 LTC to 20.6 LTC (-27.7%).