"Big Short" star Michael Burry warns: Bitcoin crash triggers over $1 billion sell-off in gold and silver

Once a precise predictor of the 2008 financial crisis and the inspiration behind the movie “The Big Short” — Michael Burry warns that Bitcoin’s recent plunge is triggering a severe chain reaction in the financial markets, with even gold and silver not spared, turning them into “withdrawal machines” for institutional investors.
On Monday, Michael Burry posted on Substack, pointing out that as the cryptocurrency market plummets, many institutional investors and corporate finance managers may be forced to sell other profitable assets to cover losses or meet liquidity needs, leading to a chain of deleveraging effects. He wrote:

Due to the decline in cryptocurrency prices, it appears that up to $1 billion worth of precious metals will be sold off by the end of the month.

Michael Burry believes that at the end of January this year, the simultaneous decline in gold and silver was mainly caused by collective selling by speculators and corporate finance managers. As Bitcoin positions suffer larger losses, they rush to sell profitable tokenized gold and silver futures to reduce risk, and this “sell the strong to support the weak” strategy directly dragged down the performance of precious metals.
Bitcoin briefly dropped below $73,000 early this morning, a 40% retracement from recent highs. Michael Burry states that this correction exposes the fragility of the underlying cryptocurrency infrastructure and poses a threat to companies holding large amounts of Bitcoin, such as Strategy (MSTR).
Michael Burry’s outlook on Bitcoin is extremely pessimistic. He said:

From a fundamental usage perspective, I see no reason for the downward trend of Bitcoin to slow down or even stop.

He warns that if Bitcoin’s price further drops to the $50,000 level, not only could mining companies face large-scale bankruptcies, but the tokenized precious metals futures market could also completely collapse, turning into a “black hole with no buyers.”
Regarding the narrative of Bitcoin as a “digital safe haven asset” or “gold substitute,” Michael Burry is even more dismissive. He believes that “corporate reserve assets are not a permanent shield,” and the market’s widespread hope that corporate and institutional entry, and the inclusion of Bitcoin in balance sheets, can provide long-term support for prices is fundamentally flawed.