France Borrows More Expensively than Greece: What Risks in Case of Default, and Why Bitcoin is Attractive

When the French 10-Year Rate Exceeds That of Greece

In recent months, French debt has been causing a stir in the bond trading rooms. The French 10-year rate has notably surpassed that of Greece, a first that reflects unprecedented distrust in France's repayment capabilities.

The French 10-year borrowing rate has just reached 4.27%, its highest level since 2008. At the same time, Greece is borrowing around 4.09%. Furthermore, French public debt now exceeds 3.3 trillion euros, or about 114% of GDP.

However, it should be noted that, for now at least, there is no widespread flight of investors. Some even seem attracted by these higher yields on French debt. Indeed, the demand for the 10-year OAT (Obligation Assimilable du Trésor) issued on September 3 exceeded the supply by 2.28 times. Despite the strong pressure on yields, institutional investors continue to buy French debt.

What You Would Lose in a Greek Scenario

The historical reminder is brutal, as in 2012, Greece had to restructure its debt, and its creditors saw their investments shrink. Those who held Greek debt lost three-quarters of their investment, receiving 25 euros back for every 100 euros lent.

Transposed to France, the impact would be massive for savers, although it is important to clarify the orders of magnitude. According to statements from the Prudential Control and Resolution Authority (ACPR), a classic euro fund is composed on average of 60% bonds, of which 41% are sovereign debt and 59% are corporate bonds.

The strictly French portion remains difficult to isolate, but French sovereign bonds represented about 12% of insurers' and pension funds' investments in 2024, according to the IFRAP Foundation. A Greek scenario, with a 75% haircut, would not wipe out three-quarters of a euro fund but would mechanically reduce about 10% of its capital, not to mention the domino effect on corporate bonds and the solvency of the insurers themselves.

Should We Panic Then? The most honest answer would be: not immediately. In 2012, Greece was at 160% of GDP on its debt and borrowing at 12%, while today France is at 114% of GDP and borrowing at 4.27%. The trajectory is concerning, but France still has some leeway.

Bitcoin, an Alternative Refuge Against Sovereign Risk

It is in this context that Bitcoin (BTC) is once again attracting attention. A rare, deflationary asset capped at 21 million units, the cryptocurrency is also outside the control of states (resistance to censorship) or central banks (no printing press for Bitcoin). The digital asset thus ticks several boxes as a hedge against sovereign risk.

Unlike a euro fund, Bitcoin does not depend on any state signature. Its value cannot be decreed to zero by a finance minister. This characteristic is part of what has fueled the rise in BTC prices during each episode of monetary distrust since 2013.

History also provides an empirical foundation for this thesis. During the Cypriot banking crisis in March 2013, when deposits over 100,000 euros were forcibly converted into shares of the Bank of Cyprus, Bitcoin surged by 173% over the month, its second-best monthly performance ever recorded, rising from about $48 on March 16 to nearly $92 on March 28. The same happened in 2015 when Greece closed its banks and capped withdrawals at 60 euros per day: deposits on the main Greek exchange exploded by 400% in the weeks following the imposition of capital controls.

The same reflex to turn to Bitcoin is also found in economies weakened by inflation. The holding of cryptocurrencies reached, for example, 25.6% of the population in Turkey in 2025, the highest rate in the world, while the average annual inflation was 58.5% on the Turkish lira.

Diversifying Before the Wind Changes

No one predicts a French default in the coming months. But the dynamics of rates impose a clear-eyed reading. The annual interest burden of the debt is expected to reach 77 billion euros in 2026, compared to 65 billion in 2025, now exceeding the budget of the National Education, for example.

Diversifying assets, moving away from exclusive exposure to sovereign bonds, considering gold and cryptocurrencies as hedges: these reflexes are also becoming those of informed individuals.