VanEck research head Matthew Sigel has proposed innovative "BitBonds" to help the United States government refinance trillions in maturing debt through Bitcoin-backed Treasury securities.
The proposal comes as the US Treasury faces the challenge of maintaining investor demand for government securities amid historically high interest rates and mounting federal debt obligations. According to Sigel, who presented at the Strategic Bitcoin Reserve Summit 2025 on April 15, these hybrid instruments would appeal to both the Treasury and global investors seeking protection from inflation.
"Interest rates are relatively high versus history. The Treasury must maintain continued investor demand for bonds, so they have to entice buyers," Sigel explained during the virtual event. He emphasized that Bitcoin has emerged as an inflation hedge, making it an attractive component for Treasury securities.
The proposed 10-year bonds would return a "$90 premium, along with whatever value that Bitcoin contains," with investors receiving all Bitcoin gains up to a maximum annualized yield to maturity of 4.5%. Beyond that threshold, gains would be split equally between the government and bondholders.
Sigel's analysis suggests the arrangement could benefit the Treasury even in worst-case scenarios. "If they were able to sell the bond at a coupon of 1%, the government would save money even if Bitcoin goes to zero," he said. "The same thing if the coupon is sold at 2%, Bitcoin can go to zero, and the government still saves money versus the current market rate of 4%."
Bitcoin's Strategic Importance in US Financial Policy
The BitBond concept emerges amid growing government interest in cryptocurrency under President Donald Trump's administration. It follows similar proposals from the Bitcoin Policy Institute (BPI), which in March estimated such a program could generate potential interest savings of $700 billion over a decade.
Traditional Treasury bonds are debt securities issued by the government to investors who loan money in exchange for future payouts at fixed interest rates. The crypto-enhanced versions would link these securities to Bitcoin, potentially offering investors more attractive returns while helping the government manage its debt burden.
The discussion extends beyond debt instruments to strategic reserves. In a Bitcoin Magazine podcast, Zach Shapiro, head of policy for the BPI think tank, suggested that a US government purchase of 1 million Bitcoin could dramatically impact the cryptocurrency's value. "If the United States announces that we are buying a million Bitcoin, that's just a global seismic shock," Shapiro said. "I think we'd probably go very quickly to something like a million dollars per Bitcoin."
This speculation follows President Trump's March 7 executive order establishing a Strategic Bitcoin Reserve and a Digital Asset Stockpile. BPI executive director Matthew Pines noted that other nations are watching how the US positions itself with Bitcoin before formulating their own strategies.
"If Donald Trump wants to make good on his promise to be a Bitcoin superpower, that ultimately comes down to how much Bitcoin you have," Pines stated. "This is a measure of how much the United States is making good on that rhetorical objective."
The executive order directs Treasury and Commerce secretaries to develop "budget-neutral" strategies for acquiring more Bitcoin. Senator Cynthia Lummis has reinforced this initiative by reintroducing the Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act, which aims to push US holdings above 1 million BTC.
Pines suggested leveraging tariff revenues as one potential "budget-neutral" approach to acquiring Bitcoin. "Revenues that the government can use to acquire more Bitcoin would be things like tariff revenue or other fees that the government collects that are not tax-based fees," he explained, citing potential sources such as royalties from oil and gas leases, sales of federal land, physical gold, and other digital assets.
President Trump's April 2 executive order imposing a 10% baseline tariff on all imports could potentially generate such revenue. However, the administration's evolving tariff policy has created uncertainty in markets regarding implementation and long-term strategy.
As the United States faces the monumental task of refinancing $14 trillion in debt over the next three years, Bitcoin-backed Treasury bonds represent an innovative approach that could potentially reduce government borrowing costs while offering investors inflation protection. While these proposals remain theoretical, they reflect the growing intersection between traditional government finance and cryptocurrency markets in American economic policy.