Michael Burry Warns Bitcoin “Death Spiral” Could Trigger Corporate and Market Losses

Highlights:

• Michael Burry calls Bitcoin a “death spiral” and warns companies face serious losses soon.
• He says corporate treasuries and ETFs cannot stop Bitcoin’s price from falling further.
• Burry said crypto losses are spreading to gold, silver, and other markets, creating wider risk.

Bitcoin is in a clear downturn. It has lost about 40% of its value since October. This sharp fall has worried many investors. Michael Burry has also raised concerns. He is known for predicting the 2008 housing crash. Now, he calls Bitcoin’s current path a “death spiral.” He warned that companies with large Bitcoin exposure could face serious financial stress.

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On Monday, Burry explained that Bitcoin is not a hedge like gold or silver. When fears about the US dollar increased, precious metals moved higher. Bitcoin, however, did not react. Because of this, he said another 10% drop could hit Strategy, the largest corporate Bitcoin holder, very hard. It could suffer major losses and may even lose access to funding. After that, he warned, Bitcoin miners would likely come under pressure next.

BITCOIN SLIDE COULD WIPE OUT COMPANIES

Michael Burry warned that Bitcoin’s ongoing decline could destroy significant value, especially for companies holding large BTC reserves. He said Bitcoin has failed as a safe haven like gold and could push aggressive corporate holders into…

— *Walter Bloomberg (@DeItaone) February 3, 2026

Meanwhile, on Tuesday, Bitcoin slipped below $73,000. This marked its lowest point since Donald Trump resumed the presidency last year. At the time of writing, BTC was trading at $76,249, reflecting a 3% decrease in the past 24 hours.

Burry Warns Corporate Bitcoin Holdings Could Trigger Faster Sell-Off

Burry said the decline is not temporary. He argued that Bitcoin has no clear reason to stop falling, even as corporate treasuries adopt it and new exchange-traded funds enter the market. He warned that almost 200 public companies now hold Bitcoin. If Bitcoin keeps falling, accountants will lower the value of these holdings on company records. Because of this, many companies may rush to sell, which can push the price down even more.

Burry also explained how companies think. When prices fall, finance teams do not wait and hope. They sell quickly to avoid bigger losses. Company treasuries are meant to protect money, not take long-term risks. He also talked about Bitcoin exchange-traded funds. He said they have made Bitcoin more like a risky trading asset, not a stable one. Bitcoin is now moving closely with the stock market. So, if stocks fall, Bitcoin may fall even harder.

ETF Outflows Deepen Crypto Stress, Burry Warns of Spillover Risk

Bitcoin exchange-traded funds have recently seen very large outflows. These are among the worst daily withdrawals since November. Burry said that three major outflows happened in the last ten days of January. This shows that a lot of money is leaving the market, and investor confidence is fading.

He also said that losses in crypto are now spreading to other markets. Bitcoin’s total market value is below $1.5 trillion, and household exposure remains low. Even so, traders are selling other assets to cover their crypto losses. As a result, tokenized gold and silver futures have taken a hard hit. These contracts are not backed by real metal. When they are sold in large amounts, they pull down prices in the real metals market as well. Burry described this process as a “collateral death spiral.”

By the end of last month, he estimated that falling crypto prices led to the liquidation of up to $1 billion in precious metals. Burry warned that if BTC drops to $50,000, many miners could go bankrupt. At the same time, tokenized futures could collapse because there may be no buyers left to support them. He also linked recent losses in gold and silver directly to selling tied to crypto losses. According to him, pressure from crypto markets is spilling into traditional assets. “Sickening scenarios have now come within reach,” Burry wrote, showing how serious he believes the situation has become.

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