Arthur Hayes Says French Debt Crisis Could Send Bitcoin To $250,000 As AI Debt Risks Mount

Hayes warned that revaluing gold to 50,000–60,000 an ounce to retire U.S. Treasury debt would be inflationary.

• Arthur Hayes said he thinks a French financial crisis could force the Fed and Treasury to manufacture money, pushing Bitcoin higher.
• France's 10-year government bond yield momentarily exceeded 5% on October 1 and 2, its highest level since 2002.
• If the crisis scenario develops, Hayes anticipates Bitcoin to trade between $125,000 and $250,000 by year-end.

Arthur Hayes believes that problems in France's bond market could propel Bitcoin (BTC) to a new high. The BitMEX co-founder stated that a French debt crisis would push the Fed and U.S. Treasury to issue money. 

Hayes, speaking after his TOKEN2049 Singapore speech with CryptoBanter on Thursday, labeled France the weak link, cited its high government expenditure in relation to the size of its economy, claiming that few investors want its debt. Bond markets are already under stress. France's 10-year yield momentarily surpassed 5% on October 1 and 2, the highest level since 2002. 

Its premium over German bonds has increased to approximately 152 basis points, the highest since 2011. The government intends to borrow a record €340 billion next year. Yields have dipped since then, although they remain about 4.8%. 

In such a scenario, Bitcoin could benefit with the low end being close to Bitcoin's previous record of approximately $126,000, seen in October last year. He believes Bitcoin will trade between $125,000 and $250,000 before the end of the year if that case holds out. 

Bitcoin’s price was trading at around $82,751, down 0.5% in the past 24 hours. On Stocktwits, retail sentiment around BTC remained in the ‘bearish’ zone, as chatter stayed at ‘low’ levels over the past day.

Hayes Sees $60,000 Gold As US Debt Fix

Hayes said the U.S. would respond with a gold revaluation. “I would monetize gold and essentially depreciate the dollar against gold,” he said. He said he would set the price for gold at $50,000 to $60,000 per ounce. 

The gain would allow Washington to retire the whole stock of Treasury securities. Hayes predicted that the move would be significantly inflationary. He described it as the only method he sees to deal with excessive debt and high interest payments. 

Hayes Warns AI Data Center Debt Could Trigger A 2008-Style Crisis

Hayes also finds risk in investing in AI. The U.S. economy is so heavily dependent on building data centers, they’re like real estate projects, he said. That means if tenants can’t pay, lenders will cease financing new developments. 

The waste could become obvious in 2027 and 2028, he said. Bad debt could then extend to insurers and fiduciaries, as it happened in 2008. Hayes anticipates governments will print money to make insurers whole, rather than allow AI to cause a recession.

Soaring sovereign yields are squeezing out AI funding, he said. Hyperscalers care less about the increased costs of debt because they see the benefit of constructing advanced AI as endless, Hayes said. Countries like France are the ones that are squeezed.

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