"Big Short" Michael Burry: Bitcoin has already plummeted 40%, and further declines could have "catastrophic consequences" for Bitcoin treasury compani...

According to Mars Finance, on February 4th, renowned American short seller Michael Burry warned that Bitcoin has already plummeted by 40%, and further declines could cause lasting damage to companies that have accumulated large amounts of the asset over the past year. He believes Bitcoin has proven to be a purely speculative asset, failing to serve as a hedging tool like precious metals. Burry stated in an article on Monday that if Bitcoin falls another 10%, the most aggressive Bitcoin treasury firm, Strategy, will suffer billions of dollars in losses and be virtually barred from accessing capital markets. He warned that a Bitcoin decline could trigger "catastrophic consequences," including a spillover effect to broader markets and a "collateral death spiral" in tokenized metal futures. This warning came as Bitcoin continued its plunge on Tuesday, briefly falling below $73,000, erasing all gains since Trump's re-election in November 2024. Since reaching its all-time high in early October, the cryptocurrency has fallen by more than 40%. Burry added that the emergence of spot ETFs has only exacerbated Bitcoin's speculative nature and increased the token's correlation with the stock market. Bitcoin's correlation with the S&P 500 has recently approached 0.50. Theoretically, when losing positions begin to grow, liquidations should be aggressively initiated. Since late November, Bitcoin ETFs have been recording some of the largest single-day outflows, three of which occurred in the last 10 days of January. This trend suggests that institutional investor confidence in Bitcoin is waning, and ETFs, originally seen as a tool to expand Bitcoin adoption, may instead be accelerating sell-offs during market downturns. Burry points out that the decline in cryptocurrencies is partly responsible for the recent collapse in gold and silver, as corporate Treasurers and speculators need to mitigate risk by selling profitable positions in tokenized gold and silver futures. If Bitcoin falls to $50,000, miners will go bankrupt, and "tokenized metal futures will collapse into a black hole with no buyers."