Newmarket Capital CEO Proposes Bitcoin-Backed Bonds

Andrew Hohns, CEO of Newmarket Capital, proposed integrating Bitcoin into government bonds to alleviate national debt and enhance the U.S. strategic reserve.

During his presentation at the Bitcoin Policy Institute’s “Bitcoin for America” event on March 11, Hohns introduced the concept of “Bit Bonds,” a new type of U.S. Treasury bond utilizing Bitcoin for government financing. This innovative approach aims to decrease government borrowing costs while creating a strategic Bitcoin reserve, offering American families a tax-free investment option.

Hohns suggested the U.S. government could issue approximately $2 trillion in Bit Bonds, using 90% of the funds for government purchases and 10% for Bitcoin acquisition. With every $100 allocated, $10 would be invested in Bitcoin. He remarked that a $2 trillion issuance could mean acquiring $200 billion worth of Bitcoin at a price of $90,000 per BTC, which approximately amounts to 2.22 million Bitcoins.

Hohns emphasized that these bonds would enable the federal government to secure $200 billion worth of Bitcoin while simultaneously saving about $554 billion on 10-year interest rates. Bit Bonds would have a significantly lower interest rate of 1% annually, compared to 4.5% for traditional U.S. Treasuries, thus greatly reducing interest expenses.

In addition, he noted that Bit Bonds could attract foreign investors, providing eligible collateral for various swap and derivative arrangements. Investors might experience a 4.5% compound annual growth rate, similar to current Treasury yields, and share in the upside of Bitcoin purchases, potentially yielding between 7% and 17% annually.

Hohns highlighted that this approach could address federal debt concerns projected to reach $50.8 trillion by 2045. He mentioned that Bit Bonds could be an effective tool against inflation and suggested they be tax-exempt for American citizens. A family could invest $2,900 and see returns of 7% to 17% over a decade, contingent on Bitcoin’s performance.