Rinse the navy beans well. Add the beans, 8 cups water, and 1/2 teaspoon salt to your Instant Pot. Secure the lid and set the cooker to high pressure for 15 minutes. Allow the pressure to release naturally. Drain the beans in a colander and rinse with cold water. Set the beans aside.
Switch your Instant Pot to the 'Sauté' setting. Add the chopped bacon and cook until it starts to turn golden, stirring occasionally.
Add the chopped onion and bell pepper and cook until soft. Add 1/2 cup of water and turn off the 'Sauté' setting. In a bowl, mix together molasses, ketchup, brown sugar, mustard, and the remaining 1 cup water. Add to the pot.
Return the beans to the pot and stir to combine. Secure the lid and cook on high pressure for 25 minutes. Allow a natural pressure release, then open the lid and stir gently before serving.