The crisis brewing in France could be the spark that sets off a fresh wave of dollar liquidity and sends crypto assets flying, according to Arthur Hayes in his latest essay, “Atención”. Hayes argues that stress in Europe could hit the US banking funding channel, forcing the Fed to ramp up its purchases of short-term Treasurys.

How European Stress Could Fire Up the Fed’s Money Printer

Hayes points out that BNP Paribas, Crédit Agricole, and Société Générale account for about 20% of lending in the US repo market. If French turmoil forces these banks to pull back, the cost of financing US government debt could spike. In that scenario, Hayes says, the Fed would have to step in and buy more short-term Treasurys—effectively printing new dollars. He estimates the Fed is already backing about 39% of new T-bill issuance, and if the Treasury steps up long-term bond buybacks, the Fed’s balance sheet could expand by roughly $100 billion a month.

Liquidity Signal: EUR/JPY and France’s Vulnerability

For Hayes, the EUR/JPY pair is the key signal to watch for the next liquidity wave. He expects it to drop from the current ~185 down to 140 or lower by June 2027. This call is tied to rising yields on French OATs, capital outflows, and local banks looking shaky. Hayes also sees extra pressure coming from Asia, with capital repatriation and more aggressive selling of European assets versus US ones. In a worst-case scenario for France, he sees the country launching its own QE and tightening capital controls, which could seriously warp the eurozone’s current currency setup. He lays out all these points in his “Atención” essay.

What This Means for Crypto

Hayes’ take: French crisis → banking stress → pressure on US repo market → more Fed money printing → more liquidity for risk assets, including crypto. He says Maelstrom is still holding a core Bitcoin position. For more speculative plays through 2026, Hayes is eyeing ETH at $10,000, ENA at $0.50, and mentions ETHF.