Bitcoin Bonds Worth $2 Trillion? U.S. Treasury Gets Bold Proposal

The Bitcoin Policy Institute has floated a visionary proposal: the U.S. Treasury should issue Bitcoin bonds valued at $2 trillion. The framework allocates 10% of these funds for acquiring BTC, reinforcing the country’s strategic reserves, while the remainder would serve the needs of the federal budget.

Proponents believe this move could do more than just alleviate debt—they argue it positions Bitcoin as a long-term yield-bearing instrument, capable of reshaping America's financial arsenal.

The bond’s fixed yield is set at just 1% annually—a conservative figure compared to the 4–5% yields on traditional treasuries. Yet the appeal lies elsewhere: a built-in profit-sharing mechanism that ties investor returns to the performance of BTC.

Here’s how it works:

• Bondholders receive 100% of gains up to a cap of $155.3 per bond,
• Beyond that, they share in 50% of all additional BTC-driven appreciation—a calculated bet on crypto's future embedded within a sovereign instrument.

Imagine this: someone acquires a ten-year Bitcoin bond worth $100. Of that, only $10 is used to buy BTC directly. Now, if Bitcoin’s value climbs tenfold in a decade, the returns could unfold as follows:

• $100 repaid in full,
• $10 in steady, fixed interest,
• $45.3 from BTC growth up to the set cap,
• And half of the profit beyond that, equaling $22.35 in this case.

This asymmetric payoff structure creates a scenario where both investors and the government can benefit simultaneously, particularly in favorable bitcoin performance scenarios. The structure’s elegance is its alignment of incentives: investors are motivated by potential bitcoin gains, while the government benefits from lower borrowing costs and potential reserve appreciation, leading to more bitcoin adoption and accumulation,

the analysts note, pointing to the potential upside embedded in the structure.

By preserving the foundational elements of conventional bonds—security of principal and predictable payouts—this model unlocks a new layer of financial opportunity.

Analysts are also advocating for full tax exemption on earnings from Bitcoin bonds, a move that would further enhance their appeal.

With such incentives, the bonds could resonate far beyond Wall Street, attracting not just institutional capital, but also the attention of more than 130 million U.S. households, many of whom are working with an estimated $3,000 in investable funds.

Check this out: Tokyo’s Metaplanet Raises $13.3 Million to Buy More Bitcoin

What’s Next for the Bitcoin Bond Strategy?

The rollout hinges on a new legislative bill, but once greenlit, things will move in stages.

First up: a pilot release of $5–10 billion in Bitcoin bonds to put the system through its paces and gauge how the market reacts.

If the trial succeeds, the initiative could go mainstream—folded into the standard U.S. government bond issuance process.

At a 53% CAGR (historical median performance), the government’s share would reach approximately $6.48 trillion, with bitcoin valued at approximately $6.3 million per BTC. The total Bitcoin Bond program value of $14.06 trillion would represent approximately 28% of the current U.S. Treasury market size ($50 trillion), or roughly 33% of the U.S. equity market capitalization ($42 trillion),

reads the proposal by the Bitcoin Policy Institute.

A phased rollout gives the plan room to breathe, letting it shift with the tides of market change and regulatory updates. The team also plans to use dollar-cost averaging and solid security—think cold storage for crypto and 2FA for every access point. 

And here’s the kicker: even if BTC stays right where it is, issuing $2 trillion in Bitcoin bonds could save $70 billion a year in interest payments—that’s $700 billion over the next decade.

Analysts say this setup could kill two birds with one stone: cut down on the national debt and open up a new source of income if Bitcoin grows over time. That kind of upside could position the U.S. as a frontrunner in digital finance and offer something fresh for investors looking to build long-term capital—especially those thinking beyond traditional portfolios.

Read on: Michael Saylor’s Strategy Acquires $1.92 Billion Worth of Bitcoin on March 31

So while the plan might feel like a moonshot right now, it’s a bold attempt to blend old-school finance with the future. And if it gains traction later on, it could completely rewrite the rules of the financial game.