PANews reported on April 16 that according to Cryptoslate, Matthew Sigel, head of digital asset research at VanEck, proposed a new debt instrument called "BitBonds," which combines U.S. Treasury bonds with Bitcoin exposure as a new strategy to manage the government's upcoming $14 trillion refinancing needs. The concept was proposed at the Strategic Bitcoin Reserve Summit to address sovereign funding needs and investors' demand for inflation protection.
The BitBond will be designed as a 10-year security consisting of 90% traditional U.S. Treasury exposure and 10% Bitcoin, with the Bitcoin portion funded by the proceeds from the bond sales. At maturity, investors will receive the full value of the U.S. Treasury portion, or $90 for every $100 of the bond, plus the value of the Bitcoin allocation. In addition, investors will receive all of the upside gains in Bitcoin until its yield to maturity reaches 4.5%. Any gains above that threshold will be split equally between the government and bondholders. Sigel said the BitBond would be a "convexity bet" for investors who believe in Bitcoin because the instrument would offer asymmetric upside while retaining a layer of risk-free return. However, its structure means investors will bear the entire downside risk of the Bitcoin exposure.
Previously , the Bitcoin Policy Institute (BPI) proposed issuing Bitcoin bonds (BitBonds) to help the United States repay its national debt.