Andrew Hohns, founder of Newmarket Investment Management, has outlined a proposal for U.S. “Bit Bonds” that would combine sovereign debt issuance with direct bitcoin exposure. Presented at the Bitcoin Policy Institute’s March 11 summit in Washington, D.C., the idea is designed to address several policy goals at once: reduce federal borrowing costs, create a savings vehicle for households, and give the government upside exposure to bitcoin’s long-term appreciation.
The proposal emerged during a period of heightened interest in bitcoin’s place in public policy, with the event taking place alongside President Trump’s executive order establishing a Strategic Bitcoin Reserve. Hohns framed Bit Bonds as a fiscal innovation that could connect debt management with digital asset accumulation, rather than treating the two as separate policy tracks.
How the Bit Bonds structure would work
Under Hohns’ framework, the U.S. government would issue $2 trillion in bonds. Of that total, 90% would go toward regular government funding needs, while 10%, or $200 billion, would be used to purchase bitcoin. The securities would pay an annual coupon of 1%, substantially below the roughly 4.5% yield referenced for 10-year U.S. Treasuries at the time of the presentation.
Hohns argued that this lower coupon could generate major savings for the federal government. Based on his presentation, the structure could reduce interest expense by an estimated $554 billion in present-value terms over a 10-year period. In his view, the government could simultaneously secure substantial bitcoin holdings and cut borrowing costs, creating what he described as a dual benefit.
The investor side of the proposal is also central to the pitch. Buyers of Bit Bonds would receive a 4.5% annual return plus 50% of bitcoin’s price appreciation, while the government would retain the other half of the bitcoin upside. That revenue-sharing model is intended to make the bonds attractive relative to conventional fixed-income products, while preserving a meaningful long-term gain for the state.
Household savings and tax treatment
Hohns emphasized that Bit Bonds should not only appeal to institutional capital, but also serve as a savings tool for American households. He proposed that U.S. families be allowed to access the instrument on a tax-free basis, shielding gains from both income taxes and capital gains taxes. In his argument, favorable tax treatment would broaden participation and make the product more useful as a long-term financial vehicle.
Using bitcoin’s historical performance as a reference point, Hohns suggested that even moderate growth assumptions could produce annualized returns of 7% to 17% for household investors. He presented the bonds as a potential hedge against inflation, describing them as a way to give ordinary families exposure to an asset that has historically outperformed many traditional stores of value over long horizons.
The logic behind the household case is straightforward: if the bond delivers baseline income while also offering participation in bitcoin’s upside, then families could benefit from both capital preservation and growth potential. In that sense, Bit Bonds are being positioned not merely as a debt instrument, but as a hybrid public savings product tied to the performance of a digital asset.
Long-term debt reduction thesis
The most ambitious element of the proposal lies in its long-range fiscal implications. Hohns argued that if bitcoin continues to appreciate over time, the government’s retained share of gains could become large enough to materially offset federal debt. He cited a scenario based on the 25th percentile of bitcoin’s historical growth rate, or 37% annually, to illustrate the idea.
Under that assumption, the government’s portion of bitcoin gains could reach $1.776 trillion by 2035. Looking even further ahead, Hohns projected that by 2045, those retained gains might exceed $50.8 trillion, a figure he said could match projected federal debt levels. These numbers form the centerpiece of the argument that a relatively small bitcoin allocation today could evolve into a significant sovereign asset base over the coming decades.
That thesis, however, is explicitly dependent on bitcoin maintaining substantial long-term growth. The proposal does not eliminate debt through structural budget reform; instead, it relies on the possibility that an appreciating digital asset could create a powerful balance-sheet offset for the government over time.
Policy alignment and open questions
Hohns also linked the Bit Bonds concept to broader debt-management objectives, noting that it aligns with Treasury Secretary Bessent’s stated goal of spreading out debt maturities and reducing refinancing risk. In that respect, the proposal is being framed not only as a bitcoin strategy, but also as a tool that could support more flexible sovereign financing.
Still, major questions remain. Bitcoin is a volatile asset, and any public debt product tied to it would likely face scrutiny from policymakers, regulators, and traditional bond investors. Legislative support would also be required if the idea were to move beyond a conference-stage proposal and become part of actual federal financing policy.
The summit where Hohns presented the concept ended with calls for further legislative action, underscoring that the debate is no longer limited to whether governments should hold digital assets. It is increasingly expanding into whether bitcoin can play a formal role in fiscal policy, sovereign balance-sheet strategy, and public savings design.
For supporters, Bit Bonds represent a “win-win-win” structure for taxpayers, savers, and policymakers. For critics, the concept may appear too dependent on optimistic assumptions about bitcoin’s future performance. Either way, the proposal marks a notable moment in the evolving conversation about how cryptocurrency could intersect with national debt management and state finance.