The increasing financial deficit of France’s central bank could lead to a surge in money printing, potentially releasing billions in new capital for Bitcoin.
According to a press release published in March 2025, the Banque de France (BdF) reported a net loss of 7.7 billion euros ($8 billion) for fiscal year 2024, primarily due to negative net interest income resulting from high interest payments.
This loss has pushed France’s government deficit to over 168 billion euros ($176 billion) in 2024, which amounts to 5.8% of the country’s Gross Domestic Product (GDP), significantly surpassing the European Union’s 3% threshold.
As a result, France’s central bank is among the weakest performers in the EU, with the deficit indicating capital leaving the country.
Arthur Hayes, co-founder of cryptocurrency exchange BitMEX, suggests that France’s financial situation may lead to “trillions of euros” in money printing by the European Central Bank (ECB), which could usher in new liquidity for Bitcoin (BTC).
“Capital is fleeing France. If you evaluate the gross changes among other members, it’s the worst,” Hayes told Cointelegraph during an interview at TOKEN2049 in Singapore. “The actual risk is French capital moving to Germany and Japan as they invest in their local markets while the US alters the global landscape.”
“This scenario prompts the ECB to print now or later in the trillions of euros, boosting overall liquidity,” Hayes noted. “This would be another positive for crypto.”
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ECB faces pressure to act
Approximately 60% of French bonds and debt are owned by foreign investors, with Germany and Japan being the primary holders.
However, with a drop in US investments, Hayes argues that the German and Japanese capital that previously helped fund France’s budget is no longer available.
“My theory suggests that the ECB will need to print now or print later, leading to a loss of control in both scenarios as people may prefer to default, redenominate, implement capital controls, or print money to sustain their lifestyles.”
Hayes believes the ECB is left with no choice but to either print now to facilitate French spending or later to stabilize the European banking sector. “There are no alternatives,” he asserted.
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The widening fiscal deficit in France may compel the ECB to adopt quantitative easing (QE), which involves central banks purchasing bonds and injecting money into the economy to stimulate spending amid stagnant economic conditions.
In 2022, Bitcoin gained significantly from QE announcements made by major global banks, including the US Federal Reserve.
During the previous QE period, Bitcoin’s price soared over 1,050%, climbing from $6,000 in March 2020 to $69,000 by November 2021, following the announcement of a $4 trillion bond-buying initiative by the Fed on March 23, 2020, in response to the COVID-19 pandemic.
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