Editor’s Note
This article discusses investor Michael Burry’s warning that a Bitcoin downturn may force significant liquidations in precious metals markets. The views expressed are those of the individual cited and do not constitute financial advice.
Michael Burry, the legendary investor behind “The Big Short,” has predicted that the bear market Bitcoin is entering could trigger a catastrophic liquidation of $1 billion USD in gold and silver.
In a Substack post on Monday, he argued that Bitcoin has been presented as a purely speculative asset. Furthermore, the crypto asset’s correlation with precious metals has created what Michael Burry calls “nauseating scenarios” that are now within reach.
Michael Burry’s predictions coincided with Bitcoin’s price drops; such warnings reinforce negative sentiment and discourage buying the dip.
According to a Bloomberg report on Wednesday, Burry further warned that if Bitcoin falls another 10%, Michael Saylor’s strategy — the company with the largest corporate BTC treasury holding 713,502 Bitcoin in reserve as of Monday — would likely record millions in losses.
Other BTC accumulators would likely suffer a 15%-20% loss on their holdings, which would lead risk managers to “become more aggressive,” said Michael Burry.
Saylor’s strategy has become unprofitable following Bitcoin’s drop, facing an unrealized loss of over $900 million USD, as reported by Cryptonews earlier this week. Despite the cryptocurrency falling below $75,000 USD, the company accumulated an additional 855 BTC on Monday.
According to Michael Burry, there is no organic use case reason for Bitcoin to slow or stop its decline. Unlike silver or gold, the crypto asset has not responded to geopolitical risks. Companies with BTC treasuries and spot Bitcoin ETFs are not enough to keep its price afloat.
Furthermore, he warned that if the price of the crypto asset continues to fall, corporate risk managers will begin to advise selling their Bitcoin reserves.