Michael Burry, the investor known for predicting the financial crisis in 2008, warned that bitcoins the recent decline could have ripple effects across markets, particularly in gold and silver.
In a Substack post on Monday, Burry said the crypto’s decline may have forced institutional investors and corporate treasurers to offload positions in other assets to cover losses.
“It appears that up to $1 billion in precious metals was liquidated by the end of the month as a result of falling crypto prices,” Burry wrote, pointing to the drop in gold and silver in late January. He suggested that speculators and money managers rushed to de-risk by selling profitable holdings in tokenized gold and silver futures.
Bitcoin briefly fell below $73,000 on Tuesday, marking a 40% drop from recent highs. Burry said the jump exposes the cryptocurrency’s weak fundamentals and threatens companies with large holdings, such as Strategy (MSTR).
“There is no organic use case causing Bitcoin to slow down or stop its descent,” he said. If the price falls to $50,000, Burry warned, mining companies could face bankruptcy and the market for tokenized metal futures could “collapse into a black hole with no buyers.”
Burry argued that bitcoin has failed in its pitch as a digital safe haven and an alternative to gold.
“There is nothing permanent about treasury assets,” he added, dismissing the idea that corporate or institutional holdings in bitcoin would provide lasting support.
Bitcoin’s recent bullrun was fueled by the launch of spot ETFs and a wave of institutional interest. But Burry sees these as temporary forces rather than signs of real adoption. In his view, bitcoin remains speculative and without the anchor of any intrinsic value or widespread utility.
Although Burry’s bearish takes often spark debate, they have also proved prescient before. For investors with crypto exposure, his warning raises questions about what happens if bitcoin’s decline triggers another wave of forced selling across markets.
