Andrew Hohns, founder of Newmarket Investment Management, has outlined a proposal for U.S. “Bit Bonds,” a debt instrument designed to combine conventional sovereign borrowing with direct exposure to bitcoin. Speaking at the Bitcoin Policy Institute’s March 11 summit in Washington, D.C., Hohns argued that the structure could help the federal government reduce interest costs, broaden household access to bitcoin-linked returns, and potentially use long-term crypto appreciation to offset part of the national debt burden.
The proposal emerged at a moment of heightened policy attention around bitcoin in the United States, with the event taking place alongside President Donald Trump’s executive order establishing a Strategic Bitcoin Reserve. In that setting, Hohns framed Bit Bonds as a fiscal innovation rather than a pure crypto product, presenting them as a mechanism intended to serve taxpayers, investors, and policymakers at the same time.
A $2 Trillion Structure With a Bitcoin Allocation
Under Hohns’ plan, the U.S. government would issue $2 trillion in bonds. Of that amount, 10%, or $200 billion, would be used to purchase bitcoin, while the remaining 90% would continue to fund ordinary government operations. The bonds would carry an annual interest rate of 1%, a level far below the 4.5% yield referenced for 10-year U.S. Treasuries at the time of the proposal.
Hohns argued that this lower coupon structure could generate substantial savings. Based on his presentation, the U.S. could reduce borrowing costs by an estimated $554 billion in present-value interest expense over a decade. He described the arrangement as unusual but compelling: the federal government could acquire a large bitcoin position while simultaneously lowering the cost of debt issuance.
His argument rests on the idea that investor demand for a hybrid instrument might allow the government to borrow more cheaply than through standard long-duration Treasury issuance. In exchange for accepting the lower base coupon, investors would receive additional upside tied to bitcoin’s performance.
How Returns Would Be Shared
According to the proposal, investors in Bit Bonds would receive a 4.5% annual return plus 50% of bitcoin’s price appreciation. The U.S. government would retain the remaining half of any bitcoin gains. In Hohns’ telling, this split creates a dual benefit: bondholders gain exposure to bitcoin without directly holding the asset in a standalone form, while the government preserves meaningful upside if bitcoin appreciates over time.
The design is central to the pitch. Instead of treating bitcoin solely as a reserve asset or as a speculative allocation, Bit Bonds would embed the digital asset into sovereign financing. Hohns suggested this could broaden the appeal of government debt by giving investors a pathway to participate in bitcoin upside through a federally issued instrument.
A Savings Tool for American Households
Hohns also emphasized the proposal’s retail dimension. He advocated for tax-free access to Bit Bonds for U.S. families, with gains shielded from both income tax and capital gains tax. In his view, that treatment would turn the instrument into a more attractive savings vehicle at a time when inflation and diminished purchasing power remain major concerns for households.
Using projections based on bitcoin’s historical performance, he argued that even relatively modest growth scenarios could produce annualized returns of 7% to 17% for families. He presented Bit Bonds as a practical financial tool rather than merely a macroeconomic experiment, saying they could help ordinary savers preserve and grow wealth in inflationary conditions.
That framing is important because it shifts the discussion beyond debt management. The proposal is not only about how Washington finances itself, but also about whether the government should create a tax-advantaged, bitcoin-linked product aimed at household balance sheets.
The Long-Term Debt Offset Thesis
The most ambitious part of Hohns’ case concerns bitcoin’s potential long-run appreciation. He suggested that if bitcoin continues to rise over time, the government’s retained share of gains could become large enough to offset a meaningful portion of federal liabilities.
In the scenario he cited, using the 25th percentile of bitcoin’s historical growth rate, or 37% annually, the government’s retained bitcoin gains could reach $1.776 trillion by 2035. Extending the same logic further, those gains could exceed $50.8 trillion by 2045, a figure he said would be roughly comparable to projected federal debt levels.
These estimates are clearly dependent on sustained bitcoin appreciation and therefore carry a high degree of uncertainty. Still, they form the backbone of the proposal’s strategic appeal: if bitcoin performs strongly over multiple cycles, the government’s participation in the upside could become fiscally significant rather than merely symbolic.
Alignment With Treasury Goals — and Major Open Questions
Hohns further argued that Bit Bonds are consistent with Treasury Secretary Bessent’s objective of extending debt maturities and reducing refinancing risk. If investors were willing to accept the proposed structure, the instrument could theoretically help spread out government liabilities while lowering near-term financing costs.
But the concept also raises obvious concerns. The source article notes that questions remain around bitcoin’s volatility, the legal and regulatory framework needed for such an issuance, and the practical hurdles of securing legislative support. A sovereign debt instrument partially linked to bitcoin would represent a major departure from traditional public finance, and it is far from clear how lawmakers, regulators, bond investors, and the broader public would respond.
There is also the broader issue of risk transfer. A lower coupon may look attractive to the government, but the structure would rely on confidence that bitcoin-linked upside is enough to attract demand. In periods of severe crypto market weakness, that assumption could be tested quickly.
A New Front in the Bitcoin Fiscal Debate
The summit closed with calls for additional legislative action, highlighting how quickly bitcoin is moving from the margins of financial policy into larger debates about reserves, debt strategy, and national balance sheet management. Bit Bonds remain only a proposal, but they illustrate how advocates are increasingly trying to position bitcoin as an instrument of statecraft rather than simply a private investment asset.
Whether the idea advances or not, Hohns’ presentation marks another step in the expanding conversation about crypto’s role in fiscal policy. For supporters, Bit Bonds offer a “win-win-win” framework that could reduce interest costs, strengthen savings incentives, and give the U.S. a potentially valuable long-term asset. For skeptics, the proposal underscores how difficult it would be to anchor sovereign debt strategy to an asset class still known for sharp volatility and unresolved regulatory complexity.
Either way, the concept has added a new and provocative chapter to the debate over how bitcoin might fit into the financial architecture of the United States.