Michael Burry, the investor known for predicting the 2008 financial crisis, warned that Bitcoin The recent decline could have ripple effects across all markets, especially gold and silver.
In an article published by Substack on Monday, Burry said crypto’s decline could have forced institutional investors and corporate treasurers to dump their positions in other assets to cover their losses.
“It appears that up to $1 billion worth of precious metals were liquidated at the very end of the month due to the decline in cryptocurrency prices,” Burry wrote, highlighting the decline in gold and silver in late January. He suggested that speculators and cash managers rushed to reduce risk by selling profitable holdings in tokenized gold and silver futures contracts.
Bitcoin briefly fell below $73,000 on Tuesday, marking a 40% decline from recent highs. Burry said the fall reveals the cryptocurrency’s weak foundations and threatens companies with large stakes, such as Strategy (MSTR).
“There is no organic reason for Bitcoin to slow or stop its descent,” he said. If the price falls to $50,000, Burry warned, mining companies could face bankruptcy and the token metal futures market could “collapse into a black hole with no buyers.”
Burry argued that bitcoin had failed in its pitch as a digital safe haven and alternative to gold.
“There is nothing permanent about treasury assets,” he added, rejecting the idea that corporate or institutional holdings in Bitcoin would provide lasting support.
Bitcoin’s recent rise has been fueled by the launch of spot ETFs and a wave of institutional interest. But Burry sees these as temporary strengths rather than signs of real adoption. In his view, bitcoin remains speculative and devoid of inherent value or widespread utility.
Although Burry’s bearish views often spark debate, they have also proven prescient in the past. For investors exposed to crypto, his warning raises questions about what would happen if bitcoin’s fall triggered another wave of forced selling in the markets.
