Michael Burry and the Bitcoin crash: the hidden dangers of digital finance

Michael Burry, who became famous for anticipating the 2008 financial crisis, is once again in the spotlight with a new series of warnings - this time aimed at the world of cryptocurrencies. At the center of his concerns is the recent and sharp downturn in Bitcoin, which, according to the investor, could trigger ripple effects well beyond the crypto market itself.

In remarks reported by Bloomberg and other international financial outlets, Burry described the current phase as potentially vulnerable to a “self-reinforcing downward spiral.” The issue, in his view, is not only the decline in Bitcoin’s price - sliding into the $72,000–$75,000 range after a deep correction from the cycle’s highs - but the high degree of leverage and interconnection that has been built around the crypto ecosystem in recent years.

Particular attention was paid to publicly listed companies that hold large amounts of Bitcoin on their balance sheets, such as Strategy Inc. (formerly MicroStrategy). Burry warns that a further drop in prices could put pressure on these companies’ finances, restrict their access to capital markets, and force asset sales, amplifying overall market volatility.

The investor also reiterated one of his long-standing criticisms: in times of stress, Bitcoin does not behave as a safe haven. On the contrary, it tends to move in line with riskier assets, undermining the narrative that portrays it as an alternative to gold. In this context, Burry also pointed to the risk of liquidations in related instruments, such as tokenized gold and silver, which could be sold off to cover losses in the digital asset space.

The final message is consistent with the style that made Burry famous: not a prediction of an imminent global market collapse, but a clear warning. When financial leverage meets excessive confidence, even a “normal” correction can turn into something far more destabilizing. And once again, Burry urges investors not to underestimate the warning signs.

Andrea Pelucchi