Andrew Hohns, CEO of Newmarket Capital, has proposed a new plan for the U.S. to issue $2 trillion in “Bit Bonds” to purchase $200 billion worth of Bitcoin as a strategic reserve asset.
Hohns presented the plan at the Bitcoin Policy Institute’s “Bitcoin for America” conference on March 11, 2025, suggesting that the strategy could diversify U.S. national reserves and reduce long-term debt servicing costs.
The proposal states that, 10% of the bond proceeds — approximately $200 billion — would be used to buy Bitcoin, while the remaining 90% would go toward standard government expenses.
The bonds would be sold at a 1% interest rate for the first 10 years, which is less compared to the current U.S. 10-year Treasury yield of roughly 4.5%.
“The proposed rate for the Bit Bond would be 1%, a reduction of 3.5% per year, or $70 billion on $2 trillion aggregate issuance. Over ten years, that’s $700 billion,” Hohns said during the event.
He positioned the plan as a way to capitalize on Bitcoin’s long-term potential as a store of value and anti-inflation shield while saving U.S. debt-servicing costs.
However, Hohns clarified that the proposal remains a “thought experiment” and not a genuine policy proposal. He further stated that its implementation would depend on political support, regulatory reforms, and market conditions.
Potential Benefits and Financial Impact
Hohns’ Bit Bonds proposal could potentially create several financial benefits if adopted:
- Interest Savings: Issuing bonds at 1% instead of the current 4.5% Treasury rate would save the government approximately $70 billion per year, totaling $700 billion over the next ten years.
- Strategic Bitcoin Reserve: A $200 billion Bitcoin purchase would make the United States one of the largest holders of the cryptocurrency, following the executive order signed by President Trump.
- Attractive to Investors: Bit Bonds would offer a guaranteed 4.5% return on a senior basis, matching current Treasury yields, along with a potential increase from the Bitcoin price surge.
Hohns also recommended that American families be allowed to purchase Bit Bonds as tax-free investments, allowing families to benefit from fixed returns and long-term appreciation in Bitcoin.
“This is a powerful tool to preserve American savings from inflation and build long-term wealth creation,” Hohns said.
Challenges and Market Implications
Despite the potential benefits, the Bit Bonds proposal also has its challenges:
- Bitcoin Volatility: Bitcoin’s history of price volatility may lead to instability in the value of the reserves.
- Regulatory and Political Uncertainty: The proposal would require Congressional approval and regulatory support.
- Market Impact: A $200 billion government-driven Bitcoin purchase would significantly influence Bitcoin’s market dynamics.
Hohns acknowledged that the proposal is speculative and ambitious. He described it as a starting point for debating how Bitcoin could be integrated into national financial strategies.
However, the size of the proposed Bitcoin acquisition and the political challenges involved make it unlikely that such a plan would advance without major revisions and political backing.