Haciyev Reşit 
Michael Burry, known for predicting the 2008 global financial crisis, has warned that the recent sharp decline in Bitcoin could affect not only the crypto market but also broader financial markets. According to Burry, Bitcoin’s drop below $73,000 may have forced institutional investors to sell positions in precious metals like gold and silver to cover crypto-related losses. This scenario indicates that sharp movements in the crypto market can create forced selling pressure in traditional assets as well.
Burry: Crypto Losses Hit Precious Metals
In a Substack post published on Monday, Burry argued that the downturn in crypto markets has caused a chain reaction. Institutional investors and corporate treasuries, he claimed, are forced to reduce positions in more liquid and easily convertible assets to offset losses in Bitcoin and other crypto holdings.
Burry summarized the situation as follows:
“It appears that up to $1 billion worth of precious metals was liquidated at the end of the month due to falling crypto prices.”
This assessment is based on the sudden pullbacks in gold and silver prices at the end of January. According to Burry, speculators and corporate treasurers sought to reduce risk by selling profitable positions in tokenized gold and silver futures. This suggests that sharp movements in the crypto market can indirectly pressure precious metals through forced selling.
On Tuesday, Bitcoin briefly fell below $73,000, experiencing roughly a 40% drop from its recent highs. Burry argues that this pullback exposes Bitcoin’s weak fundamental dynamics. He notes that the decline poses a serious risk, particularly for companies holding significant Bitcoin on their balance sheets. Burry pointed to firms like Strategy (formerly MicroStrategy) as potentially coming under pressure due to their large Bitcoin positions. He also warned that if Bitcoin were to fall to around $50,000, some mining companies could face bankruptcy risks.
“Bitcoin Hasn’t Been a Digital Safe Haven”
Michael Burry also strongly criticized Bitcoin’s commonly cited “digital gold” narrative. He argued that Bitcoin has proven to be neither a digital safe haven nor a true alternative to gold.
“There is no organic reason that will stop or slow Bitcoin’s decline.”
Burry believes recent price surges in Bitcoin were largely driven by the launch of spot ETFs and temporary institutional interest, which does not represent lasting adoption in the real world. He considers this demand speculative and insufficient to establish a durable price floor.
“Collateral Death Spiral” in Tokenized Silver
One of Burry’s most striking warnings concerned the tokenized silver market. He described the situation as a “collateral death spiral”:
- Crypto prices fall
- Leveraged positions are liquidated
- Collateral in tokenized metals must be sold
- Sales push prices even lower
Burry noted that this cycle is particularly pronounced on platforms with high leverage. He highlighted that liquidations in tokenized silver on some crypto platforms even temporarily exceeded Bitcoin liquidations. This was observed especially on platforms like Hyperliquid, which handle highly leveraged trades.
Burry stated:
“It was reported that tokenized silver futures ironically exceeded Bitcoin liquidations on a crypto market called Hyperliquid.”
This scenario shows that crypto exchanges are no longer just venues for digital asset trading—they have effectively become 24/7 macro trading platforms. Stress and collateral pressure from traditional markets can now transmit into crypto markets much faster through tokenized commodities.
Crypto Is No Longer Just Crypto
According to Michael Burry, recent events clearly demonstrate that crypto markets are no longer isolated or self-contained. The impact of Bitcoin’s sharp decline extends beyond digital assets, triggering forced sales in traditional assets like gold and silver. His warning highlights a significant risk for institutional investors exposed indirectly to crypto. A critical question now looms for the markets: Could the decline in Bitcoin mark the beginning of a broader global liquidation wave?
You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates.