Bitfinex’s tokenized bond, despite its high hopes, has drastically underperformed by securing a mere $1.5 million instead of the anticipated $10 million in initial investment.
In October, Bitfinex Securities unveiled the ALT2611 Tokenized Bond, marking their foray into listing real-world assets. Now, as of November 15, the product has officially been launched and is ready for action.
Nevertheless, the official website released a disheartening update, stating that a paltry $1.5 million had been generated, amounting to a mere 15% of the sought-after goal, following a fortnight-long opportunity.
Alternative, a securitization fund headquartered in Luxembourg and overseen by Mikro Kapital, issued ALT2611, a 36-month bond denominated in USDT (Tether).
Bitfinex introduced the innovative ALT2611 Tokenized Bond on their platform, marking a significant breakthrough in fundraising for capital.
What Are Tokenized Bonds?
ALT2611, a type of tokenized bond, serves as a digital rendition of conventional bonds that are issued through blockchain technology. These tokenized bonds bring forth a multitude of benefits, including enhanced liquidity, improved accessibility, heightened security levels, enhanced transparency, and the ability to engage in trading activities 24/7.
The ALT2611 bond required 125,000 USD for the minimum initial purchase while allowing subsequent trading in units of 100 USD.
The bond excludes American citizens and individuals currently residing within the borders of the United States.
The lackluster reaction towards Bitfinex’s tokenized bond has attracted disapproval within the crypto community.
According to a well-known crypto trader, Novacula Occami, the debut of Bitfinex’s USDT bond has failed, leading him to believe that the USDT stablecoin will not have a significant influence on capital markets.
Paolo Ardoino, the Chief Technology Officer of Tether, expressed optimistic expectations for the tokenized bond, deeming it a transformative milestone for capital raising. He envisioned USDT becoming the foundational denomination asset within the burgeoning financial landscape, heralding a new era.
The Liquid Network, lauded for its impressive capacity, saw the release of the bond—a Bitcoin sidechain issue.
Earlier this year, Bitfinex Securities managed to acquire a license as a Digital Asset Service Provider in El Salvador. This country has been actively investigating the possibility of issuing Bitcoin bonds on its own.
In 2023, El Salvador’s sovereign dollar bonds have proven to be highly successful with an outstanding 70% return on investment.
Tether and Bitfinex Agree to Settle FOIL Dispute
Tether and Bitfinex have resolved a conflict involving a legal request under the Freedom of Information Law (FOIL), made by a collective of journalists, which notably includes Zeke Faux hailing from Bloomberg Businessweek.
Despite Tether and Bitfinex affirming their dedication to transparency, it should be noted that they have made it clear that they will not be disclosing all of their documents.
The businesses claimed that implementing a comprehensive publicized disclosure of their documents would deviate from conventional protocols observed in the corporate world.
At present, Tether’s USDT reigns as the most extensive stablecoin globally, boasting an impressive worth of about $88.5 billion.
iFinex, a company headquartered in Hong Kong, is the proud owner of both Tether Limited and the Bitfinex cryptocurrency exchange.
Frequently Asked Questions:
1. Could you provide an update on the current state of Bitfinex’s tokenized bond?
Bitfinex’s bond tokenization venture has failed to meet its projected goal, amassing a mere $1.5 million as opposed to the anticipated sum of $10 million.
2. At what point did the ALT2611 Tokenized Bond make its debut and become operational?
The inception of the ALT2611 Tokenized Bond occurred in October, and it officially commenced operations on the 15th of November.
3. What does ALT2611 entail, and what is its specific organization like?
ALT2611, a 3-year bond valued in USDT, is brought forth by Alternative, a securitization fund located in Luxembourg and overseen by Mikro Kapital. Bitfinex’s platform serves as the avenue for offering this tokenized bond.
4. Tokens bonds, what are they and what benefits do they bring?
ALT2611, a type of tokenized bond, encompasses bonds that conform to the blockchain system. They offer a plethora of benefits, including enhanced liquidity, increased accessibility, heightened security, amplified transparency, and the opportunity for continuous trading opportunities.
5. What were the qualification criteria for investors to participate in the ALT2611 bond, and what was the minimum amount required for the initial purchase?
The ALT2611 bond has a required minimum initial purchase size of 125,000 USD. It is imperative to understand that American citizens or individuals located in the United States cannot access this bond.
6. How has the cryptocurrency community reacted to Bitfinex’s tokenized bond offering?
Bitfinex’s inaugural USDT bond issuance has received lackluster feedback, drawing criticism from the crypto world. Particularly, Novacula Occami, a well-regarded cryptocurrency trader, labeled the event as a complete failure.
7. What led Bitfinex to perceive the tokenized bond as a revolutionary prospect?
Bitfinex saw the tokenized bond as a revolutionary chance to generate funds, as Paolo Ardoino, Tether’s Chief Technology Officer, hinted that it could establish USDT as the fundamental asset of the expanding financial system.
8. What is the relevance of choosing this particular blockchain for issuing the bond?
The issuance took place on the Liquid Network, a Bitcoin sidechain recognized for its remarkable capacity to process transactions at a rapid pace.
9. Tether and Bitfinex have resolved a conflict, what is this recent progress referred to as?
Tether and Bitfinex have reached a resolution concerning a legal matter involving a request made by a consortium of reporters, which included Zeke Faux from Bloomberg Businessweek, under the Freedom of Information Law (FOIL).
10. Can you reveal the present worth of USDT, Tether’s digital currency, and enlighten me about the entity that possesses Tether Limited?
The world’s largest stablecoin, USDT, is offered by Tether. Its market value stands impressively at around $88.5 billion. Tether Limited, the company behind this stablecoin, is under the ownership of iFinex, a Hong Kong-based firm. Notably, iFinex also holds ownership of the popular Bitfinex cryptocurrency exchange.