Could Bitcoin help the U.S. tackle its towering national debt? VanEck’s head of research, Matthew Sigel, thinks so—and he’s got a bold idea to prove it.

At the Strategic Bitcoin Reserve Summit 2025 on April 15, Sigel unveiled a novel financial instrument dubbed “BitBonds”—a hybrid U.S. Treasury bond partially backed by Bitcoin. The goal? Help the government refinance $14 trillion in debt while tapping into the growing appeal of crypto assets.

What Are BitBonds?

BitBonds would function like traditional 10-year Treasury bonds—but with a twist. Each bond would consist of 90% conventional debt and 10% Bitcoin exposure. According to Sigel, this mix could entice both risk-conscious traditional investors and those bullish on digital assets.

Even if Bitcoin were to crash completely, Sigel argued, the bonds would still offer cost-saving potential. "If Bitcoin goes to zero, the government still saves money," he said, highlighting that these instruments could help refinance debt at lower interest rates than current market levels.

Why Bitcoin?

The pitch is simple: investor appetite for Treasury bonds is shrinking, especially in a high-interest-rate environment. But adding Bitcoin exposure could make bonds more attractive, particularly to investors looking for protection against inflation.

"Bond buyers want insulation from the erosion of the dollar’s value," Sigel said. "Bitcoin has emerged as a credible hedge against inflation."

The bonds could offer a $90 premium return, plus the value of the Bitcoin included. If Bitcoin performs well, returns could soar—up to an annualized yield of 4.5%. If Bitcoin beats that threshold, any excess gains would be split 50/50 between the government and the investor.

The Risks and Rewards

The upside for investors is clear: If Bitcoin surges, BitBonds could be significantly more profitable than traditional bonds. But there’s a catch—Bitcoin must maintain a strong growth trajectory to make the bond attractive on lower coupon rates.

From the government’s perspective, BitBonds present a win-win. Selling bonds at a 1–2% coupon rate—far below the current ~4%—would save billions in interest, even if Bitcoin’s value dropped to zero.

Not the First Attempt

Sigel’s BitBond proposal isn’t the first of its kind. In March, the Bitcoin Policy Institute suggested a similar crypto-backed Treasury bond strategy, estimating $70 billion in annual savings and $700 billion over a decade.

With the U.S. potentially warming up to crypto under President Donald Trump’s administration, the idea of blockchain-enhanced financial tools is gaining traction. Treasury bonds have long been the bedrock of government finance—now they could be due for a digital upgrade.

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