Veteran investor Michael Burry - best known for his role in The Big Short and predicting the 2008 housing collapse - has issued a stark warning about the potential fallout if Bitcoin (BTC) continues on its current downward trend, calling several possible outcomes “sickening scenarios.”
In a recent Substack post, Burry laid out a trio of severe risk scenarios linked to deeper declines in Bitcoin price, highlighting the potential damage beyond the crypto space:
🧨 1. Multi-Billion Losses for Institutions Holding Bitcoin
According to Burry, a drop below $70,000 could inflict heavy losses on institutional holders such as Michael Saylor’s Strategy - one of the largest corporate Bitcoin holders - potentially exceeding $4 billion and cutting off access to capital markets. Other firms with significant BTC holdings could suffer 15-20% losses, prompting risk managers to take aggressive defensive moves.
😨 2. Existential Crisis for Major BTC Holders
If BTC slides further to $60,000, Burry believes this could trigger what he calls an “existential crisis” for Strategy, undermining its financial stability and shaking investor confidence in corporate BTC treasury strategies.
⚠️ 3. Crypto Miner Bankruptcies and Metals Market Collapse
In Burry’s most extreme scenario, a fall to $50,000 could force crypto miners into bankruptcy, leading them to sell large BTC inventories into a weak market - further driving prices down. He also warned that tokenized metals futures markets (linked to gold and silver) could collapse if crypto’s leveraged positions are liquidated into those instruments, creating a “black hole” effect in pricing. However, he noted physical precious metals might still attract safe-haven demand.
Burry’s commentary comes amid one of Bitcoin’s longest losing streaks in years, with the digital asset down roughly 37% from its peak, and recent bearish sentiment becoming increasingly prominent across financial circles.
📉 Broader Market Context
Burry has long been a vocal critic of Bitcoin’s sustainability, previously describing it as a speculative bubble and warning that its price dynamics bear similarities to historical bubbles. He has frequently highlighted that Bitcoin has not behaved as a reliable safe haven - particularly in times of macro stress - unlike traditional stores of value such as gold.
Investors and risk managers are now watching Bitcoin’s key support levels closely, as further BTC weakness could trigger cascading effects not only in crypto markets but in correlated financial instruments. Burry’s warnings - while controversial - underscore the potential systemic implications if Bitcoin’s slide persists.
