VanEck’s Matthew Sigel Proposes “BitBonds” to Tackle $14 Trillion US Debt

VanEck’s Matthew Sigel Proposes “BitBonds” to Tackle $14 Trillion US Debt

In a bold move to modernize debt financing, VanEck’s Head of Research, Matthew Sigel, has proposed a hybrid US Treasury bond partially backed by Bitcoin. The concept, dubbed “BitBonds,” was unveiled during the Strategic Bitcoin Reserve Summit 2025 held on April 15.

Sigel’s vision involves the issuance of 10-year US Treasury bonds composed of 90% traditional government debt and 10% Bitcoin exposure. The hybrid structure is designed to appeal both to the US Treasury and a new generation of investors seeking a hedge against inflation.

Bitcoin as a Strategic Asset in Debt Markets

At a time when interest rates remain historically high, Sigel emphasized the importance of maintaining investor demand for Treasury bonds. According to him, integrating Bitcoin offers a compelling value proposition: while providing protection against dollar and asset inflation for investors, it also enables the government to lower borrowing costs.

Even in the unlikely scenario that Bitcoin’s value collapses entirely, Sigel asserted that the government could still realize significant savings when refinancing a staggering $14 trillion in maturing debt over the next three years.

How BitBonds Would Work

Under the proposed model, BitBond holders would receive a $90 premium over 10 years, plus the value of the Bitcoin portion. Investors would benefit from Bitcoin gains up to a capped yield of 4.5% annually. Should Bitcoin appreciate beyond that threshold, the surplus returns would be split evenly between the government and bondholders.

“BitBonds are structured to provide investors with upside potential while limiting downside risk,” said Sigel. “Even if Bitcoin goes to zero, the Treasury can still save versus the current average bond yield of around 4%.”

Sigel also pointed out that if the government managed to issue BitBonds at a 1% or 2% coupon rate, the savings would be substantial—even in a bearish Bitcoin scenario. However, for the bonds to outperform at coupons closer to 3% or 4%, Bitcoin would need to post a healthy compound annual growth rate.

A Growing Case for Crypto-Linked Bonds

Sigel’s BitBond initiative is not the first attempt to blend crypto with sovereign debt. In March, the Bitcoin Policy Institute proposed a similar concept, estimating it could save the government up to $70 billion annually—or $700 billion over a decade.

As President Donald Trump’s administration signals increased openness toward digital assets, the possibility of crypto-linked government bonds is gaining traction. Such instruments could mark a pivotal evolution in how national debt is structured—potentially turning Bitcoin into a mainstream financial tool.