'Big Short’ Michael Burry sends chilling warning after Bitcoin plunge

“The Big Short” capitalist Michael Burry has often been captious of cryptocurrencies.

For idiosyncratic who correctly predicted the 2008 lodging situation and the 2000 dot-com bubble, his words often transportation value successful marketplace commentary.

Burry is sounding the alarm connected Bitcoin (BTC), erstwhile again, aft the weekend's crypto marketplace clang saw billions getting wiped out, and cryptocurrencies fell to caller lows.

Related: Bitcoin crashes beneath $80K again arsenic investors panic

In a Substack station published connected Feb. 2, Burry warned that Bitcoin's caller breakdown beneath cardinal terms levels could trigger cascading effects crossed crypto and adjacent markets.

Burry argued that Bitcoin is failing a important test: proving itself arsenic a durable hedge against currency debasement.

Instead, helium said, the plus is behaving similar a purely speculative trade, dissimilar golden oregon silver, which person rallied amid geopolitical accent and dollar weakness.

His informing comes arsenic Bitcoin continues to slide, concisely dipping beneath $74,000 and erasing each gains made since Donald Trump was re-elected successful November 2024.

At property time, Bitcoin was down 2.8% and trading at $76,463.19.

Burry said Bitcoin’s autumn done large thresholds has opened the doorway to what helium called “sickening scenarios.”

One of the biggest risks, successful his view, lies with firm treasuries that person aggressively accumulated Bitcoin.

If prices autumn different 10%, Burry warned that Michael Saylor's Strategy (NASDAQ: MSTR), among the largest firm holders, could beryllium billions of dollars underwater, efficaciously shutting it retired of superior markets.

Notably, Bitcoin has failed to respond to accepted macro tailwinds. While precious metals rallied to grounds highs amid geopolitical tensions, Bitcoin did not payment from dollar weakness oregon risk-off flows.

“There is nary integrated use-case crushed for Bitcoin to dilatory oregon halt its descent,” Burry wrote.

• Analyst warns Bitcoin could driblet to $60K next

• White House meets crypto and banking executives arsenic Bitcoin crashes

• Gold elephantine becomes large purchaser of U.S. debt

While Bitcoin’s adoption by nationalist companies and spot exchange-traded funds has expanded demand, Burry argues that this enactment is acold little unchangeable than galore investors assume.

Nearly 200 nationalist companies present clasp Bitcoin connected their equilibrium sheets. But treasury assets indispensable beryllium marked to market, meaning sustained terms declines could unit hazard managers to urge selling, perchance accelerating losses.