In a bid to revolutionize capital raisings, Bitfinex and Tether launched ALT2611, a tokenized bond backed by Tether (USDT).
However, two weeks after its debut, the result has been disappointing.
With an initial goal of raising 10 million USDT, only a modest 15% has been achieved, equivalent to 1.5 million USDT.
This underperformance has raised questions about the viability and attractiveness of this new financing model.
ALT2611, issued by Alternative, a Luxembourg-based securitization fund managed by Mikro Kapital, was touted as a revolutionary product.
These tokenized bonds, powered by blockchain technology, offer benefits such as liquidity, security, transparency and 24-hour operability.
Despite these advantages, it seems that the investment community is still not convinced.
The bond, with a 10% coupon and a term of 36 months, required a minimum initial purchase of 125,000 USDT, with operations in the secondary market in denominations of 100 USDT.
HOWEVER, INTEREST HAS BEEN LITTLE, AND BITFINEX’S GOAL HAS NOT BEEN REACHED
Initial expectations projected Tether (USDT) as the underlying asset that would lead this new financial paradigm.
Paolo Ardoino, Tether’s chief technology officer, had envisioned the launch as a “new era for capital raisings.”
However, optimistic projections have not materialized.
The bond issuance was made on the Liquid Network, a high-capacity sidechain associated with Bitcoin.
Bitfinex Securities, which obtained a Digital Asset Service Provider license in El Salvador, has been exploring the issuance of Bitcoin-backed bonds in the country.
El Salvador, known for its progressive adoption of cryptocurrencies, has enjoyed solid performance on its sovereign dollar bonds, with a 70% return in 2023.
Despite these initiatives and initial enthusiasm, the failure to reach the fundraising goal for ALT2611 raises questions about investor confidence and the viability of Tether-backed tokenized bonds in the current financial market.
