"If Bitcoin Crashes, It Becomes a Black Hole for Financial Markets"...Expert Issues Chilling Warning

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[Financial News] Investor Michael Burry, who predicted the 2008 financial crisis, has warned that a sharp drop in Bitcoin could spill over into the broader financial markets.
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According to foreign media reports on the 5th (local time), Burry recently wrote in a Substack newsletter that "as Bitcoin breaks below key support levels, ‘sickening scenarios’ involving massive value destruction are coming into view."
As of the 3rd, Bitcoin was trading at 72,867 US dollars, down more than 7% from 24 hours earlier. Compared with the peak in October last year, it has fallen by more than 40%. The break of a key psychological support level over the weekend also erased much of the gains that followed Donald Trump’s re-election as US president in November 2024.
Burry projected that if Bitcoin falls another 10% from current levels, companies with large holdings could face losses in the billions of dollars. In that case, he argued, access to capital markets could effectively be cut off. As a prime example, he pointed to MicroStrategy, which has been aggressively buying Bitcoin since 2020 and is regarded as the largest corporate holder among listed firms.
Expectations that Bitcoin would serve as a store of value, like a form of "digital gold," also appear to be fading. Amid geopolitical tensions and concerns over a weaker dollar, prices of gold and silver have been strong, while Bitcoin has remained under pressure. Burry commented that this shows it is "a purely speculative asset."
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Recent declines of 10–30% in gold and silver prices are also being linked to the crypto market. As trading in complex financial products that bundle crypto assets with precious metals has increased, a sell-off on one side can trigger forced liquidations on the other, creating a chain reaction.
At the end of last month, falling crypto prices are estimated to have forced the liquidation of up to 1 billion dollars’ worth of precious metals. Some analysts warn that if the market for tokenized metal futures without sufficient physical backing collapses, the value of the collateral could plunge as well, creating a "death spiral."
Burry warned that in the worst-case scenario, Bitcoin could sink to 50,000 dollars. He added that a wave of bankruptcies among mining companies could follow, and that the market for tokenized metal futures could be sucked into a black hole with virtually no buyers left.
hsg@fnnews.com Han Seung-gon Reporter