Arthur Hayes, co-founder of cryptocurrency exchange BitMEX, believes that the growing financial deficit of France's central bank could be a positive catalyst for Bitcoin. Hayes suggests the deficit may lead to a new wave of money printing by the European Central Bank (ECB), potentially unlocking billions in new capital for Bitcoin.
The Banque de France (BdF), France's central bank, reported a net loss of 7.7 billion euros ($8 billion) for the fiscal year 2024. This loss was primarily attributed to negative net interest income resulting from high-interest payments. Consequently, France's government deficit has surged to over 168 billion euros ($176 billion) in 2024, exceeding the European Union's 3% GDP limit at 5.8%. This places France among the worst-performing countries in the bloc, with the deficit indicating capital outflows.
Hayes highlighted that France's financial situation may prompt the ECB to print "trillions of euros," injecting fresh liquidity into the market, some of which could flow into Bitcoin. He noted the outflow of capital from France, suggesting that investors are moving their assets to countries like Germany and Japan, or investing in their home markets, influenced by the changing world order led by the United States. Hayes made these remarks during an interview at TOKEN2049 in Singapore.
Hayes has a history of bold predictions regarding Bitcoin's price. He has repeatedly stated that Bitcoin could reach $1 million by 2028. Hayes views Bitcoin as a hedge against capital restrictions and inflation, particularly amid the shifting global financial landscape. He also pointed out that government deficits could pressure the Federal Reserve to resume bond purchases under quantitative easing (QE), which would lower yields and inflate asset prices.
While acknowledging potential volatility, Hayes maintains a long-term bullish outlook for Bitcoin. He believes macroeconomic factors, such as the weakening of US Treasuries and the repatriation of foreign capital, could drive Bitcoin to unprecedented levels. Hayes's analysis aligns with a broader narrative of Bitcoin as a safe haven asset in times of economic uncertainty and monetary expansion. The potential for increased money printing by central banks, driven by factors like France's deficit, could further strengthen this narrative and drive investment into Bitcoin.
