Original title: Burry: "The Great Blank": has fallen by 40%, and if bitcoin drops by 10%, it triggers the "disaster consequences."

Original by Jo Wing, seen on Wall Street

Michael Burry, known for his success in predicting the collapse of the US real estate market in 2008, warned that Bitcoin had collapsed by 40 per cent, and that a continued decline could cause lasting damage to the large number of companies that had accumulated the asset over the past year. He considered that Bitcoin had proved to be a purely speculative asset and had failed to become a hedge tool like precious metals。

Burry states in his Monday Substack article that if bitcoin drops by another 10 per cent, one of the most aggressive bitcoin banks, Strategy Inc., will suffer billions of dollars in losses and little access to capital markets. He warned that the fall in bitcoin could have “a catastrophic effect”, including passing on to a wider market and leading to a “mortgage death spiral” of monetized metal futures。

At the time of this warning, Bitcoin continued to fall on Tuesday, once breaking $73,000, erasing all the increases since Trump was re-elected in November 2024. Since the beginning of October, when the record was high, that number has fallen by more than 40 per cent。

Despite Burry ' s warning, the market for encrypted money is still small and unlikely to trigger widespread transmission. Bitcoin has a market value of less than $1.5 trillion, limited household holdings and a narrow range of enterprises suggest that any wealth effects may remain manageable。

Bitcoin exposes the nature of speculation and fails to be an asset to avoid risk

Burry noted in the article that bitcoin had failed to respond to typical drivers such as the weakening of the dollar or geopolitical risks, while gold and silver had reached record highs due to the concern about the depreciation of the dollar caused by global tensions. "There is no reason why Bitcoin is organically used to slow down or stop its decline," says Burry。

According to Bloomberg, analysts attributed the decline in Bitcoin to multiple factors, including the loss of inflows, a shrinking liquidity and the widespread loss of macro-attractiveness. Many home-grown traders of encrypted currencies also cooled the currency economy and were bet on events as the forecast market rose。

Bitcoin has fallen over the weekend to its lowest level since last year ' s tariff-induced unrest and continues to decline on Tuesday. This is in stark contrast to the arguments of its long-standing supporters, who believe that the fixed supply of Bitcoin makes it comparable to gold。

Treasury is under tremendous pressure

Burry warned that the introduction of Bitcoin by the financial services of the enterprise and the launch of the new secret currency spot trading platform trading fund were not sufficient to support its prices indefinitely or to prevent catastrophic consequences in the event of its significant decline. He noted that nearly 200 listed companies held bitcoin。

While this has helped to expand demand, “inventory assets are not permanent”, he wrote. Inventory assets must be valued at market value and included in the financial report. If the price of bitcoin continues to decline, the risk manager will begin to recommend its company for sale。

Burry mentioned in particular that if Bitcoin fell by another 10 per cent, Strategy Inc., the most aggressive Bitcoin stock company, would be in a loss of billions of dollars and found to be largely closed down by capital markets. He describes these “optimistic scenes as now within reach”。

ETF TO INCREASE SPECULATION AND MARKET RELEVANCE

Burry added that the emergence of spot ETF only increased the speculative nature of Bitcoin and increased its relevance to stock markets. He wrote that bitcoin was recently close to 0.50 with the 500 index. In theory, when the loss position begins to grow, liquidation will be actively initiated。

Burry notes that since late November, Bitcoin ETF has been recording some of the largest single-day outflows, three of which took place in the last 10 days of January。

THIS TREND SUGGESTS THAT INSTITUTIONAL INVESTORS ' CONFIDENCE IN BITCOIN IS WEAKENING, WHILE ETF, ORIGINALLY CONCEIVED AS A TOOL TO EXPAND BITCOIN, MAY ACCELERATE SALES AS MARKETS FALL。

Warning the risk of collateral death

And as bitcoin continued to fall some critical levels, Burry thought it was passing to a wider market. He noted that the decline in encrypted currency was partly responsible for the recent collapse of gold and silver, as the financial managers and speculators of enterprises needed to reduce risk by selling the profit position of coined gold and silver futures。

These monetized metal futures, which are not supported by actual physical metals, may overwhelm the physical metal trade, leading to the “mortgage death spiral”, he said。

"Looks like at the end of the month, as a result of the fall in the price of encrypted currency, up to $1 billion worth of precious metals have been liquidated," Burry wrote. If the bitcoin falls to $50000, the miners will go bankrupt, and "the monetized metal futures will collapse into a black hole without buyers," he says。

Nevertheless, some market observers have pointed out that past collapses — from Terra to FTX — have not infected traditional markets. The viewers now point out that regulatory clarity and cheap valuation could be another rebound fuel. However, Burry ' s warning highlights the systemic risks posed by Bitcoin as an enterprise ' s inventory asset。

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