BitBonds Explained: The Proposal to Fund US Debt With Bitcoin-Linked Treasuries
Summary of an older article: Sam Lyman, “BitBonds: The $2 Trillion Idea That Could Slash The National Debt,” Forbes, published Apr 5, 2025.
Read the full article on Forbes →
In this April 2025 Forbes contributor piece, Sam Lyman walks through “BitBonds,” a proposal to blend bitcoin into US Treasury debt. The idea was presented by economist Andrew Hohns, founder of Newmarket Capital, at the National Press Club on Mar 11, 2025, and set out in a report he published with Matthew Pines, executive director of the Bitcoin Policy Institute.
How it would work. The Treasury would spend 90% of the money raised on ordinary government funding and use the other 10% to buy bitcoin. At maturity, investors get their full principal back regardless of what bitcoin did. They keep all of the bitcoin gain up to a 4.5% compounded return, then split anything above that 50/50 with the government, whose share would go to the strategic bitcoin reserve.
Why the backers like it. Lyman compares the design to Strategy's convertible bonds, which have sold at very low coupons because buyers want the bitcoin upside. If BitBonds drew similar demand, the Treasury could borrow more cheaply. In the article's thought experiment, $2 trillion issued at 1% instead of about 4.5% would save roughly $70 billion a year, or $700 billion over ten years. Hohns argues bipartisan action on BitBonds could “lower the US interest expense, add bitcoin to the federal balance sheet.”
The caveat. The savings depend on strong demand at low rates. And because investors are guaranteed their principal, a fall in bitcoin would be absorbed by the government, not the bondholder (our observation, not the article’s). The piece also quotes Senator Cynthia Lummis as reviewing the report rather than endorsing it.
Why it matters for ETF readers. BitBonds sits alongside the 2025 strategic bitcoin reserve as a proposal to put bitcoin on the federal balance sheet. Like spot ETFs and corporate treasuries, it would add a large, mostly passive buyer, which is why policy ideas like this are worth tracking alongside daily ETF flows and treasury company holdings.
This is ETFbit's own summary of a third-party article; figures and projections are the article's and the proposal authors', not ours. Not investment advice.
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