By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
BlockscrollBlockscroll
Notification Show More
Latest News
Zuckerberg's Pursuit of Metaverse Reality Costs $13.7B
Zuckerberg’s Pursuit of Metaverse Reality Costs $13.7B
Press Release
According to JPMorgan Survey: 72% of Institutional Investors Avoid Crypto
According to JPMorgan Survey: 72% of Institutional Investors Avoid Crypto
Crypto
The Indian Government Announces New Crypto Tax Penalties
The Indian Government Announces New Crypto Tax Penalties
Crypto
Woah! Dogecoin Whales Made 523 Transactions as DOGE Soars 34%!
Woah! Dogecoin Whales Made 523 Transactions as DOGE Soars 34%!
Crypto
More than 300,000 Changsha Merchants Adopted Digital Yuan
Crypto
Aa
  • Bitcoin
  • Blockchain
  • Ethereum
  • Contact Us
Reading: Litecoin is trading at a 1,800% premium via Grayscale’s LTC trust — But why?
Share
BlockscrollBlockscroll
Aa
Search
Have an existing account? Sign In
Follow US
  • Bitcoin
  • Blockchain
  • Ethereum
  • Contact Us
© 2022 Foxiz News Network. Ruby Design Company. All Rights Reserved.
Blockscroll > Litecoin > Litecoin is trading at a 1,800% premium via Grayscale’s LTC trust — But why?
Litecoin

Litecoin is trading at a 1,800% premium via Grayscale’s LTC trust — But why?

Rudolph Harmon
Last updated: 2022/11/19 at 11:58 AM
By Rudolph Harmon 2 years ago
Share
3 Min Read
SHARE


Shares in Grayscale Investments’ Grayscale Litecoin Trust, or LTCN, have been trading at a whopping 1,800% premium over the market rate of their underlying asset, Litecoin (LTC).$319 per Litecoin? This difference is primarily due to retail investors’ inability to purchase shares directly from Grayscale Investments, whose funds are aimed exclusively at accredited investors.LTC holdings per LTCN share (orange) and premium (blue). Source: Bybt.comIt costs $319 to buy a share in Grayscale Litecoin Trust. However, its LTC holdings per share are currently worth just $16.42. That means it’s almost 20 times more expensive to buy Litecoin via the trust than regular spot exchanges.LTCN shares have recently traded for as high as $496 in November 2020 — 38% above Litecoin’s highest closing price in December 2017. Although the premium on Grascale’s Litecoin fund has been drastically cut over the past three months, LTCN shares remain an unattractive investment vehicle for retail traders.The trust offers exposure to LTC without investors needing to handle or custody cryptocurrency. Nevertheless, its shares can only be sold by Grayscale Investments to institutional investors.The unusual spread appears to have been driven by increasing retail demand for Litecoin ahead of the Mimblewimble privacy solution rollout, with Grayscale accumulating $258 million worth of LTC so far.Arbitrage is not really an optionGrayscale’s Litecoin Trust aggressively ramped up accumulation in February, buying at a rate equal to 80% of new Litecoin being mined during the period.In the past month @Grayscale Trust has purchased over 174,000 Litecoin. This is approx 80% of all Litecoin mined last month… pic.twitter.com/5RmDARZ3dy— litecoin (@litecoin) March 1, 2021

However, anyone thinking about a potential arbitrage opportunity should note that all LTCN shares require a one-year holding period after they’re created. Besides, the trust requires all investors to be accredited, with a minimum of $25,000 to start.The United States-based investment firm also offers trusts for other cryptocurrencies, including Bitcoin (BTC). The Grayscale Bitcoin Trust (GBTC) is the firm’s largest holding, with over $30 billion in assets under management. In recent days, the Grayscale Bitcoin Trust traded at a discount to net asset value as the TSX Purpose Bitcoin ETF saw record inflows. A diminished appetite in the secondary markets creates a potential imbalance, as there is no redemption program for the Grayscale rust funds.Had there been a way to convert those shares back to their LTC or BTC equivalent, a market maker would gladly buy the trust shares at a discount.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

You Might Also Like

Signature Bank, Binance’s Fiat Partner, Sets a Minimum Transaction Limit

Litecoin eyes $100 after ‘rare’ LTC price breakout

Price analysis 12/2: BTC, ETH, BNB, XRP, ADA, DOGE, MATIC, DOT, LTC, UNI

South Korea’s unique and amazing crypto universe – Cointelegraph Magazine

Bitcoin price consolidation has shifted traders to these 4 altcoins

Rudolph Harmon May 27, 2021
Share this Article
Facebook Twitter Email Print
Share
Rudolph Harmon
By Rudolph Harmon
Follow:
Rudolph is a crypto writer. He is interested in cryptocurrencies, technology, and in particular the subject of online security. An open supporter of freedom of speech, privacy, and equality for all.
Previous Article Cryptocurrency exchange Bybit shuts up shop in UK in compliance with FCA ban
Next Article Ethereum Corrects Gains, Here’s Why 100 SMA Is The Key for Fresh Increase
BlockscrollBlockscroll
Follow US

© 2022 Foxiz News Network. Ruby Design Company. All Rights Reserved.

Join Us!

Subscribe to our newsletter and never miss our latest news, podcasts etc..

[mc4wp_form]
Zero spam, Unsubscribe at any time.

Removed from reading list

Undo
Welcome Back!

Sign in to your account

Lost your password?