LTCN shares are trading 20 times lower in comparison to the LTC holdings per share by Grayscale. Thus, it’s 20 times more expensive to buy Litecoin via Grayscale than directly through the spot exchange.
The world’s eighth-largest cryptocurrency Litecoin (LTC) is up 13% today and is just short of $200. At press time, LTC is trading at a price of $194.9 with a market cap of $12.9 billion. Interestingly, investors seeking exposure to LTC via the Grayscale Litecoin Trust are paying a premium of 1800%. The shares of Grayscale Litecoin Trust (OTCMKTS: LTCN) have been trading at this massive premium over the market rate of the underlying asset i.e. Litecoin (LTC).
Grayscale Litecoin (LTC) Trust
On Tuesday, March 2, the LTCN shares touched a peak of $391 before correcting nearly 5% by the end of the trading session. This wide difference arises majorly from the retail investors’ inability to buy LTCN shares directly from Grayscale. The Trust is basically available only to accredited investors.
While LTCN shares are trading at over $300, its LTC holdings per share are worth just $16.42. Thus, it’s 20 times more expensive to buy Litecoin via Grayscale than directly through the spot exchange.
Grayscale launched its Litecoin Trust (LTCN) last year in August 2020. The LTCN share price peaked out in November that year shooting all the way to $500. While the premium for the Litecoin fund has dropped significantly over the last three months, investment for LTCN isn’t much attractive for retail players yet.
It turns out that Grayscale itself has been aggressively buying LTC over the last month. A tweet from Litecoin shows that Grayscale scooped nearly 80% of all Litecoins mined last month.
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
Anyone willing to leverage this arbitrage opportunity with LTCN share price needs to know that all LTCN shares require a minimum of a one-year holding period after creation. Also, one needs to be an accredited investor with a minimum investment ticket of $25,000.
Litecoin Founder Calls NFT Craze Similar to ICO Mania
Non-fungible tokens (NFTs) are getting all the limelight in recent days. Bing names like Christie’s and NBA have adopted the NFT route to sell some very popular digital artwork and videos through the NFT digital collectibles.
With all the frenzy around NFTs, Litecoin founder Charlie Lee compares it to the 2017 ICO mania. Lee mentions five points of similarity between the current NFT popularity and the 2017 ICO mania. Interestingly, he also compares both to the altcoin mania of 2013.
I see a lot of parallels between 2021’s NFTs with 2017’s ICOs and 2013’s altcoins:
– easy to create new ones with no barriers
– simple to understand & explain
– brings tons of new people into crypto
– high prices & pumps create hype/FOMO
– few will hold & have value, most won’t— Charlie Lee [LTC⚡] (@SatoshiLite) March 2, 2021
Lee is not alone in his criticism of NFTs. Some of the popular personalities from the crypto space share similar opinions on it.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.