Michael Burry, the 'Big Short' investor who predicted the 2008 financial crisis, wrote on Substack Monday that Bitcoin's sharp decline could spill over into gold and silver markets. He estimates roughly $1 billion worth of precious metals were liquidated at the end of January as a direct consequence of falling crypto prices.
Burry said institutional investors and corporate treasurers likely rushed to de-risk by selling profitable holdings in tokenized gold and silver futures to cover crypto losses. Bitcoin briefly dipped below $73,000 on Tuesday, a 40% drop from its recent highs around $122,000.
Bitcoin's Foundation Shaky, Burry Argues
"There is no organic use case reason for Bitcoin to slow or stop its descent," Burry wrote. He warned that if BTC falls to $50,000, mining firms could face bankruptcy and the market for tokenized metals futures could "collapse into a black hole with no buyer." He singled out Strategy (MSTR) as one of the companies with large Bitcoin holdings that now look vulnerable.
Burry dismissed Bitcoin's pitch as a digital safe haven and alternative to gold. "There's nothing permanent about treasury assets," he said, rejecting the idea that corporate holdings would provide lasting support. He attributed Bitcoin's recent rally to spot ETF launches and institutional interest — calling them temporary forces, not signs of real adoption.
Cross-Asset Contagion Risk
While Burry's bearish views often provoke debate, his track record lends weight to this warning. For investors with crypto exposure, the key question is whether further Bitcoin declines will trigger another wave of forced selling across gold, silver, and other assets. Data cited by Burry shows gold and silver both experienced unusual selling pressure in late January, correlating with Bitcoin's drop.
Bitcoin traded around $64,168.87 at the time of writing, down about 1.2% in the last 24 hours. Gold has rebounded above $2,050/oz after the brief selloff. Burry's core argument: Bitcoin lacks intrinsic value and real utility, making its price dependent on leverage and speculation. When leverage unwinds, the ripple effects hit correlated markets.