The expanding financial deficit of France’s central bank might trigger a new round of money printing, potentially unleashing billions in fresh capital for Bitcoin.
The Banque de France (BdF), the nation’s central bank, reported a net loss of 7.7 billion euros ($8 billion) for the fiscal year 2024, primarily due to negative net interest income stemming from high interest payments, as revealed in a press release published in March 2025.
This loss pushed France’s government deficit above 168 billion euros ($176 billion) for 2024, representing 5.8% of the country’s Gross Domestic Product (GDP), far exceeding the European Union’s 3% threshold.
Now, France’s central bank ranks among the worst in the bloc, with this shortfall indicating capital flight from the country.
Arthur Hayes, co-founder of the cryptocurrency exchange BitMEX, opines that France’s financial deficit could lead to “trillions of euros” in money printing by the European Central Bank (ECB), which could inject new liquidity into Bitcoin (BTC).
“French capital is fleeing France. If you assess the gross changes of any other member, it’s the most severe,” Hayes told Cointelegraph during an interview at TOKEN2049 in Singapore. “The genuine risk is that French capital migrates to German and Japanese markets, as the US reshapes the global order.”
“This situation compels the ECB to either print now or later in the trillions of euros. That’s the total impact,” Hayes stated. “Another positive for crypto.”
Related: Ether supercycle debate, Circle reversibility plan and Aster’s surge: Finance Redefined
ECB faces choice to print “now or later”
About 60% of French bonds and debt are held by foreign investors, with Germany and Japan as the largest holders.
However, with decreased investment from the US, the capital that previously financed France’s budget from Germany and Japan is dwindling, Hayes noted.
“My thesis is essentially that the ECB will print now or later, and in both scenarios, they lose control, because in both scenarios, the public would prefer to default, redenominate, impose capital controls, or print money to maintain their living standards.”
According to Hayes, the ECB might need to print later to attempt to salvage the European banking system or print now to support French expenditure. “There are no alternatives,” he remarked.
Related: Ohio approves vendor to process crypto payments for state services
The increasing fiscal deficit in France may drive the ECB towards quantitative easing (QE), which entails central banks buying bonds and injecting money into the economy to stimulate spending amidst stagnant economic conditions.
In 2022, Bitcoin saw gains from QE announcements made by some of the world’s largest banks, including the US Federal Reserve.
During the last quantitative easing phase, Bitcoin’s price surged over 1,050%, climbing from roughly $6,000 in March 2020 to $69,000 by November 2021, following the Fed’s $4 trillion bond-buying initiative that was announced on March 23, 2020, during the COVID-19 pandemic.
Magazine: Bitcoin to see ‘one more big thrust’ to $150K, ETH pressure builds
