Emre Yumlu 
VanEck’s Director of Research Matthew Sigel has proposed a new solution to help the United States restructure its $14 trillion public debt: Bitcoin-backed Treasury bonds. This new generation of bonds, called “BitBond,” aims to boost investor appetite while offering protection against inflation.
What Is BitBond? Integrating Bitcoin Into US Treasuries
Sigel’s proposed model consists of 90% traditional government bonds and 10% exposure to Bitcoin. These bonds would have a 10-year maturity period. Investors would receive up to 4.5% annual return, and if Bitcoin gains further value, any profit beyond that threshold would be shared equally between the investor and the government.
This structure allows investors to benefit from traditional bond yields, along with potential upside from Bitcoin’s price appreciation.
Even If Bitcoin Goes to Zero, the Government Can Still Benefit
Sigel highlights a key point: even if Bitcoin’s value drops to zero, the government could still save money. For instance, if BitBonds are issued with a 1%–2% coupon rate, the U.S. Treasury would still be saving compared to the current 4% bond interest rate.
While the structure may seem riskier for investors, it creates scenarios where the government’s borrowing costs are reduced. If Bitcoin’s compound annual growth rate remains high, the model could become profitable for both sides.
Why Would Investors Choose This Bond?
According to Sigel, investors are looking for ways to hedge against the devaluation of the U.S. dollar even in today’s high interest rate environment. Bitcoin, in this context, stands out as a potential inflation hedge. The BitBond structure presents a compelling alternative by offering fixed returns plus additional gains from crypto exposure.
This Isn’t the First Proposal of Its Kind
Sigel’s idea is not the first attempt in this area. Previously, some independent financial institutions have also proposed government bonds backed by crypto assets. Such bonds were estimated to potentially save up to $70 billion annually and create an economic advantage of $700 billion over a 10-year period.
A Pro-Crypto Policy Climate Could Accelerate These Models
With the current administration showing a more crypto-friendly stance, the integration of blockchain-based solutions into traditional financial instruments is becoming more likely. Hybrid models like BitBond could gain more traction in the near future as a tool to reduce borrowing costs and attract global investor interest.
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