Premium on Grayscale’s Litecoin Trust shares rises to 900%

The premium on Grayscale Investments’ Litecoin Trust shares (LTCN) on the secondary market has risen to 900%, according to Arcane Research.

Update on the @Grayscale Litecoin Trust.

The premium is now above 900%, and it was trading at a premium above 1200% on Thursday.

Do you think the buyers of these products are aware of the large premiums they pay? https://t.co/1fkJeT73Md pic.twitter.com/Qv93V9zcaF

— Arcane Research (@ArcaneResearch) August 24, 2020

On Thursday they were trading with a premium of 1,200%.

The Ethereum Classic Trust shares were trading at a premium of 40%, indicating very low demand, analysts added.

Arcane Research explained how the premium is formed (the so-called premium). Accredited investors buy Grayscale trust shares in private placements. After that they hold the shares during the lock-up period, and then begin selling on secondary markets to retail investors.

Some retail investors are unaware of the premiums at the time of purchase.

“Because there are no cryptocurrency ETFs, these trusts are often the only option for Americans to invest in cryptocurrencies as part of a 401(k) retirement plan,” the researchers concluded.

Earlier we already reported on the colossal premiums on Grayscale’s trust shares.

Trading of LTCN and the Bitcoin Cash (BCHG) trust shares on the secondary market started at the beginning of last week.

In mid-August, Grayscale attracted a record $217 million. This was preceded by the launch of advertising on American television.

Assets under management stood at $5.9 billion as of August 21.

08/21/20 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.

Total AUM: $5.9 billion$BTC $BCH $ETH $ETC $ZEN $LTC $XLM $XRP $ZEC pic.twitter.com/z3AlViNvoK

— Grayscale (@Grayscale) August 21, 2020

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