The Real-Life Michael Burry from "The Big Short" Warns: Bitcoin Crash Could Trigger a $1 Billion Gold and Silver Sell-Off

“The Big Short” protagonist Michael Burry warns that Bitcoin falling below $73,000 could trigger a $1 billion sell-off of gold and silver to cover crypto losses. If it drops to $50,000, companies holding large amounts of Bitcoin like MicroStrategy could face serious threats, and mining companies may go bankrupt. Burry criticizes the failed narrative of Bitcoin as a hedge, stating that ETF gains are merely speculative, and warns that tokenized metal futures markets could collapse.

Michael Burry Predicts Bitcoin Crash Will Trigger Chain Reactions

The investor Michael Burry, famous for successfully predicting the 2008 financial crisis, warns that recent declines in Bitcoin could cause a chain reaction across the entire market, especially impacting gold and silver markets. On Monday, Burry posted on Substack that the decline in cryptocurrencies might force institutional investors and corporate treasurers to sell other assets to offset losses.

Burry wrote: “Due to the drop in cryptocurrency prices, it appears that up to $1 billion worth of precious metals could be sold off by the end of the month.” He refers to the decline in gold and silver prices at the end of January. He believes speculators and financial managers are rushing to sell profitable tokenized gold and silver futures to reduce risk. This observation reveals a little-known market linkage mechanism: intense volatility in crypto markets is affecting traditional commodity markets through tokenized assets and institutional asset allocations.

On Tuesday, Bitcoin briefly fell below $73,000, about 42% down from its recent high of $126,080. Burry states that this Bitcoin crash exposes the fragile foundation of cryptocurrencies and threatens companies holding large amounts of Bitcoin, such as MicroStrategy. The company holds over 713,502 BTC with an average cost of about $76,052. When Bitcoin falls below this cost basis, the company’s entire holdings are in paper loss. This financial pressure could force MicroStrategy and similar firms to sell other assets to maintain liquidity.

“Bitcoin’s price decline has no natural bottom, nor any reason to stop falling,” Burry said. He warns that if the price drops to $50,000, mining companies could face bankruptcy, and the tokenized metal futures market could “completely collapse and become irrelevant.” This forecast is based on cost structure analysis of mining companies; current mainstream mining rigs shut down at around $69,000 to $74,000. If Bitcoin drops to $50,000, nearly all mining companies would be unprofitable, triggering an industry-wide collapse.

Triple Chain Reaction of a Bitcoin Collapse

Institutional Holders Panic: Large companies like MicroStrategy face financial crises and may be forced to sell other assets

Mining Industry Collapse: If it falls to $50,000, many mining firms shut down or go bankrupt, drastically reducing hash rate and impacting network security

Tokenized Asset Collapse: Gold and silver futures tokenized products are sold off, affecting traditional commodity markets

Failure of Bitcoin as a Hedge Asset

Burry believes the narrative of Bitcoin as a digital hedge asset and gold substitute has failed. He criticizes: “Treasury assets are not permanent,” dismissing the idea that corporate or institutional holdings of Bitcoin provide lasting support. This directly challenges the core narrative of Bitcoin bulls, which has long claimed Bitcoin is “digital gold” capable of preserving or increasing value during economic crises.

However, market performance seems to support Burry’s skepticism. In 2025, as geopolitical risks and economic uncertainties increase globally, gold prices hit record highs, surpassing $3,700 per ounce. In contrast, Bitcoin plummeted over 40% from its October high, showing no signs of safe-haven characteristics. This divergence indicates that, at least in the current market environment, investors still see gold as a reliable hedge, while Bitcoin is viewed as a high-risk speculative asset.

Recent Bitcoin bullish runs have been driven by the launch of spot ETFs and influxes of institutional investors. But Burry sees these as temporary factors rather than signs of broad acceptance. He considers Bitcoin still highly speculative, lacking intrinsic value or widespread practical use. The funds attracted by ETFs mainly come from speculators chasing returns, not from long-term belief in Bitcoin as money or a store of value. Once market sentiment shifts or better investment opportunities emerge, these funds could quickly exit.

From a financial history perspective, Burry’s argument is not without merit. Truly safe assets need decades or even centuries of validation; gold has been recognized worldwide because it has maintained value for thousands of years of human civilization. Bitcoin has only existed for 15 years, mostly in highly volatile states, lacking sufficient historical evidence of reliability during extreme crises.

Burry’s Warnings’ Credibility and Controversy

Although Burry’s pessimistic views often spark controversy, he has previously demonstrated foresight. He successfully shorted the subprime mortgage market before the 2008 financial crisis, earning hundreds of millions of dollars, a story adapted into the film The Big Short, making him one of the most well-known contrarian investors globally. Since then, Burry has repeatedly warned of market bubbles; while his timing isn’t always perfect, his directional insights are often correct.

In 2021, Burry warned that Tesla’s stock was overvalued and meme stocks were in a bubble; these assets indeed experienced significant corrections afterward. In early 2022, he warned that tech stocks were overvalued, and the Nasdaq fell over 30% that year. These successes keep the market highly attentive to his views, even if not always fully agreeing, considering them important risk indicators.

However, Burry’s views on Bitcoin are also controversial. Supporters of the crypto industry argue that Bitcoin’s value logic differs from traditional assets and cannot be simply measured by intrinsic value or utility. Bitcoin’s value derives from its scarcity, decentralization, and global consensus—features that have particular significance amid ongoing fiat currency devaluation. Additionally, institutional adoption, though still early, is accelerating and could provide long-term support for Bitcoin.

For crypto investors, Burry’s warnings raise concerns: if Bitcoin crashes and triggers a new wave of market sell-offs, what will happen? The worst-case scenario is Bitcoin falling below $50,000, forcing large holdings like MicroStrategy to liquidate, mining companies to go bankrupt en masse, tokenized precious metals markets to collapse, and a chain reaction impacting the entire risk asset market. While systemic risk is low probability, if it occurs, the consequences could be severe.

A rational approach is to view Burry’s warnings as stress tests for extreme risk scenarios. Investors should assess whether their portfolios can withstand a drop in Bitcoin to $50,000, whether they are overly concentrated in crypto assets, and whether they have sufficient diversification. For leveraged investors, Burry’s warnings should be especially heeded—high leverage can amplify gains in a bull market but also magnify losses and lead to margin calls in a bear market.