BitMEX co-founder Arthur Hayes predicted that if France’s fiscal crisis materializes, the U.S. Federal Reserve and Treasury Department will ultimately have no choice but to inject liquidity, which would push Bitcoin prices to record highs.
In an interview with CryptoBanter following the Token2049 event in Singapore on October 10 (local time), Hayes identified France as the most vulnerable link in the global bond market. He assessed that France’s government spending is excessively large relative to the size of its economy, and that there are not many investors willing to buy French government bonds.
The bond market is already sending significant stress signals. France’s 10-year government bond yield briefly exceeded 5% on October 1 and 2, the highest level since 2002. The yield premium of French government bonds over German bunds also widened to approximately 152 basis points (1bp = 0.01 percentage point), marking the highest level since 2011. The French government plans to borrow a record €340 billion (approximately $381.0 billion) next year. Yields have since retreated somewhat but remain around 4.8%.
Under these circumstances, Hayes’s scenario is that if a French-led debt crisis erupts, the Fed and the U.S. Treasury will ultimately be forced to inject money, and the benefits will flow into Bitcoin. The price floor he cited is approximately $126,000, the previous all-time high recorded last October. If this scenario holds, he projected that Bitcoin could trade between $125,000 and $250,000 before year-end.
At the time of the interview, Bitcoin was trading at approximately $82,751, down 0.5% from 24 hours earlier.
Could Gold Revaluation Repay the Entire U.S. National Debt?
Hayes argued that the U.S. government could respond to fiscal deterioration and rising long-term bond yields by revaluing gold.
“If I were in charge, I would monetize gold and essentially devalue the dollar against gold,” he said. He added that he would set the gold price at $50,000 to $60,000 per ounce.
He explained that revaluing gold at such levels could effectively give the U.S. government the capacity to repay its entire outstanding national debt. While he acknowledged that such a measure would trigger significant inflation, he emphasized that it is the only way to resolve the problems of excessive debt and high interest costs.
AI Data Center Debt: A 2008-Style Crisis in the Making?
Hayes is also reading warning signs in artificial intelligence (AI) investment. He noted that the U.S. economy is overly dependent on data center construction, and that this structure resembles real estate projects. If data center tenants fail to pay their costs, lenders could halt funding for new projects.
He believes the problems from this overinvestment could become clearly evident in 2027–2028. He warned that non-performing loans could then spread to insurance companies and trust institutions, potentially leading to a pattern similar to the 2008 financial crisis.
His expectation is that rather than allowing an AI-driven recession to unfold unchecked, the government will once again inject money to cover losses at insurance companies. He also pointed out that surging government bond yields are pressuring AI-related financing. However, he explained that hyperscalers are relatively less concerned about rising borrowing costs because they view the potential profits from building advanced AI infrastructure as virtually unlimited.
Conversely, Hayes argued that entities like France face greater pressure in this environment. The implication is that France, identified as the vulnerable link in the global bond market, could become the epicenter of the crisis.