Bitfinex Securities’ first tokenized bond, ALT2611, has raised only $1.5 million against its $10 million target two weeks post-launch. This development indicates a tepid response to what was initially touted as a significant innovation in capital raising.
About the ALT2611 Tokenized Bond
Launched on November 15, the ALT2611 Tokenized Bond is a digital representation of traditional bonds issued on the blockchain. The bond, denominated in USDT, is a 36-month 10% coupon bond issued by Alternative, a Luxembourg-based securitization fund managed by Mikro Kapital.
Advantages of Tokenized Bonds
Tokenized bonds offer several benefits over traditional bonds, such as improved liquidity, accessibility, enhanced security, transparency, and the possibility of trading 24/7.
Details of the Bond Issue
The minimum initial purchase size for ALT2611 was set at 125,000 USDT, with secondary market trading allowed in denominations of 100 USDT. Notably, the bond offering excludes American citizens or persons in the United States.
Market Response and Extension
So far, only 15,000 ALT2611, or 15% of the targeted amount, has been achieved. In response to the low uptake, the offer period has been extended by another fortnight.
The lower-than-expected uptake has led to some skepticism in the market, with a crypto trader commenting on the limited appeal of the USDT bond issue. Despite the initial optimism expressed by Tether’s chief technology officer Paolo Ardoino, the bond’s performance has not aligned with these expectations.
The bond was issued on the Liquid Network, a high throughput Bitcoin sidechain. Bitfinex and Tether have not yet responded to requests for comments on the bond’s performance.
The outcome of this tokenized bond offering reflects the challenges and evolving nature of digital asset-based financial products in attracting traditional investment.