U.S. $2T Bit Bonds: A Bitcoin Bonanza or Just a Tall Tale?

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Well, well, well! Hold onto your hats, darlings! Newmarket Capital’s very own Andrew Hohns has suggested a delightful little scheme where the U.S. government could start issuing “Bit Bonds.” A bit of cheek, isn’t it? The idea? Incorporate Bitcoin into government bonds, reduce national debt, and—wait for it—buy Bitcoin for the U.S. strategic reserve. Simply fabulous, I must say! 😏

At the Bitcoin (BTC) Policy Institute’s “Bitcoin for America” event on March 11, Mr. Hohns came up with the not-so-modest proposal of creating U.S. Treasury bonds laced with Bitcoin. A stroke of genius—or is it? These so-called “Bit Bonds” would lower the government’s borrowing costs while building a glittering Bitcoin reserve. And naturally, American families will get their hands on a tax-free investment vehicle, because who doesn’t love a good tax-free ride? 💸

Now, Hohns suggests issuing a mere $2 trillion in Bit Bonds. A small sum, really, especially when you consider that 90% of the funds would go straight to the U.S. government’s Bitcoin stash, with a modest 10% used to buy the precious BTC. So, for every $100 invested, $10 would go straight to Bitcoin. It’s practically a bargain! 🤑

Let’s do the math, darling—at $90,000 per Bitcoin, $200 billion could be spent on Bitcoin, giving the government 2.22 million BTC. A little fluctuation in price? Oh, no bother, just an incidental detail. Nothing says “secure investment” quite like a crypto rollercoaster, right? 🎢

And it gets juicier! Hohns promises that the U.S. government could potentially save $554 billion over 10 years in interest payments with Bit Bonds, as these beauties offer a dreamy 1% interest rate—far less than the usual 4.5% rate of U.S. Treasuries. A veritable bargain basement deal for the government—who doesn’t love a little interest-saving spree? 💰

But wait, there’s more! Bit Bonds would also attract foreign investors—how could they resist? These bonds would serve as prime collateral for a myriad of swap and derivative deals. The cherry on top? A dazzling 4.5% annual growth rate, aligned with current Treasury yields. Investors will certainly be tickled pink with that! 🌟

And then there’s the juicy bit: after pocketing that oh-so-generous return, investors would also get a 50% share in any Bitcoin upside. That’s right, darling, 50% of the Bitcoin profits will be theirs, while the U.S. government takes the other half. Not a bad little side hustle, if you ask me. Depending on Bitcoin’s mood swings, returns could range from a decent 7% to a spectacular 17%. A tax-free one, mind you. ✨

But here’s the real kicker: Hohns claims that Bit Bonds would give the U.S. government a Bitcoin entitlement worth more than $50.8 trillion—just shy of the projected U.S. federal debt in 2045. A bit of debt defeasance by way of Bitcoin—oh, what could possibly go wrong? 😜

Oh, and it doesn’t stop there. He also proposes making these Bit Bonds available to American citizens. A “powerful tool to defend against inflation,” as he puts it. Imagine, darling, a family investing just $2,900 and receiving returns anywhere between 7% and 17% over 10 years, all while sipping mojitos in the comfort of their own homes. 🏖️

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2025-03-12 16:09