Michael Burry, the investor known for predicting the 2008 financial crisis, warned that bitcoin’s recent drop could have ripple effects across markets, particularly in gold and silver.
In a Substack post Monday, Burry said crypto’s decline may have forced institutional investors and corporate treasurers to unload positions in other assets to cover losses.
“It looks like up to $1 billion in precious metals were liquidated at month’s very end as a result of falling crypto prices,” Burry wrote, pointing to the end-of-January dip in gold and silver. He suggested speculators and treasury 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% decline from recent highs. Burry said the plunge exposes the cryptocurrency’s weak foundation and threatens firms with large holdings, such as Strategy (MSTR).
“There is no organic use case reason for Bitcoin to slow or stop its descent,” he said. If the price falls to $50,000, Burry warned, mining firms could face bankruptcy, and the market for tokenized metals futures could “collapse into a black hole with no buyer.”
Burry argued bitcoin has failed in its pitch as a digital safe haven and alternative to gold.
“There’s nothing permanent about treasury assets,” he added, dismissing the idea that corporate or institutional holdings in bitcoin would provide lasting support.
Bitcoin’s recent bull run 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 unanchored by any inherent value or widespread utility.
While Burry’s bearish takes often spark debate, they’ve also proven prescient before. For investors with crypto exposure, his warning raises questions about what happens if bitcoin’s fall triggers another wave of forced selling across markets.