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A sharp decline in Bitcoin has prompted a warning from Michael Burry, the investor famed for predicting the 2008 financial crisis. He believes the latest sell-off could spill over into other asset classes, including gold and silver.
In a recent Substack post, Burry argued that Bitcoin’s downturn may already be forcing institutional investors and corporate treasuries to liquidate profitable positions elsewhere to manage losses.
He estimated that as much as $1 billion worth of gold and silver may have been sold toward the end of January as crypto prices weakened, contributing to a brief dip in precious metals markets.
According to Burry, this selling pressure likely came from speculators and treasury managers unwinding positions in tokenized gold and silver futures, rather than physical metals, as part of broader de-risking efforts.
Bitcoin briefly fell below $73,000, marking a decline of roughly 40% from record highs. Burry said the move highlights what he sees as Bitcoin’s fragile foundation and raises risks for companies with significant crypto exposure.
He specifically pointed to firms that have accumulated large Bitcoin holdings, including Strategy Inc., warning that further downside could strain balance sheets and limit access to capital markets.
Burry cautioned that if Bitcoin were to slide toward $50,000, mining companies could face severe financial stress or even bankruptcy, while liquidity in tokenized metals markets could evaporate entirely.
Burry believes that Bitcoin does not function as a genuine safe-haven investment, which serves as the key point of his critique.
Gold and silver historically benefited during times of geopolitical tensions, dollar devaluation, and inflation worries, while Bitcoin fails to exhibit stable price movements under these conditions.
He dismissed the idea that corporate treasury adoption or institutional holdings provide durable price support, noting that such assets are marked to market and can be sold quickly if risk managers become concerned.
Burry also questioned Bitcoin's current bull market as he believed gains were speculative, driven by spot exchange-traded funds.
He observed that Bitcoin shows increased correlations with the S&P 500, indicating that Bitcoin functions more as a risk asset than a traditional investment hedge.
Recent ETF outflows, particularly toward the end of January, reinforce his view that sentiment can reverse quickly.
Also Read: How Reflation Could Impact Bitcoin and the Global Economy
Despite his warnings, Burry acknowledged that crypto’s overall footprint remains relatively small compared with traditional markets.
Bitcoin's market value, together with its limited household presence and its restricted corporate usage, creates a decreased risk for a complete financial system collapse.
He warned that ongoing price drops would create a chain reaction of sales across all crypto-related assets, leading to temporary market disruptions.
