Michael Burry, the legendary investor behind “The Big Short,” has predicted that Bitcoin’s deepening bear market could trigger a $1 billion impending catastrophic sell-off in gold and silver.
“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 said.
In a Substack post on Monday, he argued that Bitcoin has been projected as a purely speculative asset. Further, the crypto correlation with precious metals has created what Michael Burry calls as “sickening scenarios” that have now come within reach.
Bitcoin has slipped 3.17% over the past 24 hours, extending a 14.44% weekly drop amid a broader crypto market decline. The largest crypto by market cap is trading at $76,362 in the Asian morning hours on Wednesday.
Michael Burry’s predictions coincided with Bitcoin hitting $72.8K lows. That said, high-profile bearish narratives can accelerate capital rotation out of risk assets.
With BTC already down 17.74% monthly, such warnings reinforce negative sentiment and discourage dip-buying.
Saylor’s Strategy Exemplifies Institutional Risk: Michael Burry
Per a Bloomberg report on Wednesday, Burry further warned that if Bitcoin tumbles another 10%, Michael Saylor’s Strategy, the largest corporate BTC treasury firm with 713,502 Bitcoin stash as of Monday, would likely record millions in losses.
Strategy sees an “existential crisis” if BTC were to fall to $60,000. This would “find capital markets essentially closed,” Burry added.
Other BTC hoarders would likely take a 15%-20% loss on their holdings, leading risk managers to “get more aggressive,” Michael Burry said.
Strategy has turned unprofitable following Bitcoin’s slump, facing an unrealized loss of over $900 million, as reported by Cryptonews early this week. Despite the coin plummeting below $75K, the company accumulated additional 855 BTC on Monday.
If BTC Continues to Fall, Risk Managers Will Advice Companies to Sell
According to Michael Burry, there is no organic use case reason for Bitcoin to slow or stop its descent.
Unlike silver or gold, the crypto has indeed failed to respond to drivers, including geopolitical risks. BTC treasury firms and spot crypto ETFs are not enough to keep its price afloat.
Nearly 200 public companies hold Bitcoin, Burry said. “There is nothing permanent about treasury assets.”
“Bitcoin ETFs have been notching some of their biggest single-day outflows since late November, with three of them occurring in the last 10 days of January,” Michael Burry wrote.
He further warned that if the crypto’s price keeps falling, company risk managers will start advising to sell their Bitcoin stash.
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