Updated on Nov. 30 to include comment from Paolo Ardoino, chief technology officer at Bitfinex.
Bitfinex’s recently launched Tether (USDT) tokenized bond — hailed as a “new era for capital raises” —appears to have failed to garner the investment and interest the firm anticipated.
Bitfinex Securities, a platform focused on listing tokenized real-world assets (RWA), announced its first tokenized bond in October, the ALT2611 Tokenized Bond, with the product going live on Nov. 15.
However, after a two-week offer period, only $1.5 million of a $10 million target has been raised, according to the official website.
The target of 100,000 ALT2611 worth 10 million USDT was set for two weeks after launch in the announcement, but it appears to have been extended by another fortnight, with just 15,000 ALT2611, or 15% of the target reached so far.
ALT2611 is a 36-month 10% coupon bond denominated in USDT and issued by Alternative, a Luxembourg-based securitization fund managed by Mikro Kapital.
Tokenized bonds are digital representations of traditional bonds issued on the blockchain, which provides several advantages over their traditional paper counterparts, such as liquidity, accessibility, security, transparency and 24/7 trading.
The minimum initial purchase size was 125,000 USDT, with secondary market trading in denominations of 100 USDT. Moreover, ALT2611 is not offered or made available to American citizens or persons present in the United States.
Crypto trader Novacula Occami commented, “Bitfinex’s first USDT bond issue is a flop,” before adding, “Sorry Paolo, USDT ain’t going to dominate capital markets. BitFinex Securities Kazakhstan isn’t keeping investment bankers up at night.”
However, when it launched, Tether chief technology officer Paolo Ardoino labeled it as a “new era for capital raises” that would see USDT become the “underlying denomination asset of this new financial system.”
Exciting!
— Paolo Ardoino (@paoloardoino) October 25, 2023
This is the first bond listed on Bitfinex Securities. A new era for capital raises through deep liquid markets and stock/fond markets has begun.
Furthermore $USDt will become the underlying denomination asset of this new financial ecosystem.
And yes. It leverages… https://t.co/ekXj3gY7Xj
The Bitfinex tokenized bond was issued on the Liquid Network, a high throughput Bitcoin sidechain.
Ardoino responded to Cointelegraph's request for a response, saying: "We always knew it would take time for products that are inherently more stable and less speculative than crypto altcoins to gain market share in a crypto industry that is heavily focused on quick gains. But we also know that such an approach is not sustainable. Security tokens will be the future of capital raising for real-world assets.
"This is one of the first tokenized instruments of its kind, and it takes time to educate investors as to how the instrument works and how it can benefit crypto-focused investors. We are currently onboarding key investors, and we remain confident that the issuer will achieve their financial requirements through the issuance of this instrument. We expect that we will successfully conclude a substantial capital raise, delivering what will be a landmark event for crypto capital markets."
Related: Tether, Bitfinex agree to drop opposition to FOIL request
In April, Bitfinex Securities received a Digital Asset Service Provider license in El Salvador, which has been looking into issuing its own Bitcoin bonds.
Sovereign dollar bonds in the Central American country have been performing solidly, with a 70% return in 2023 as reported by Cointelegraph in August.
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