'The Big Short' Michael Burry Says "Gold and Silver Crash Also Caused by Bitcoin"

Michael Burry, the investor who amassed enormous wealth by predicting the 2008 U.S. subprime mortgage-driven financial crisis, is now warning of a crash in Bitcoin. He argues that if the downturn in the cryptocurrency market deepens further, the impact could spill over into the traditional financial markets.

According to reports on the 3rd (local time) by U.S. financial media outlets including Bloomberg, Burry said in a recent letter to investors, "Bitcoin has broken below a key support level. A 'disgusting scenario' that will lead to massive value destruction has come into view." Late last year, Burry launched a paid subscription newsletter service on Substack, through which he has been sharing his investment views.

Burry Michael. Yonhap News Agency

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Burry stated, "If Bitcoin falls another 10%, listed companies that hold large amounts of Bitcoin, such as MicroStrategy, will incur valuation losses amounting to several billions of dollars," adding, "For those companies, it would in effect become extremely difficult to raise funds in the capital markets." MicroStrategy is a so-called Digital Asset Treasury (DAT) company that holds Bitcoin as a core asset on its corporate balance sheet and pursues a strategy of boosting its market capitalization through that holding.

MicroStrategy, led by Chief Executive Officer (CEO) Michael Saylor, has been aggressively purchasing Bitcoin. If Bitcoin were to fall below MicroStrategy’s average acquisition price, it would deliver a critical blow to the company’s financial structure, and this would in turn worsen its overall financial conditions, including its credit rating and its ability to issue corporate bonds.

Burry has also argued that the recent plunge in the gold and silver markets is related to the cryptocurrency market. He explained, "The decline in precious metal prices at the end of last month was the result of the crash in coin prices," adding, "When Bitcoin prices plunged, hedge funds were forced to liquidate their profitable positions in gold and silver for risk management purposes."

He flatly dismissed the narrative by saying, "The claim that Bitcoin is a digital safe asset, and the analysis that it is a substitute for gold, have both failed."

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