• The three stages of collapse
• "The Lincoln tunnel"

Michael Burry, the investor famed for betting against the housing market in "The Big Short," has opined that Bitcoin has failed as a safe haven. Burry is convinced that a deepening rout could trigger a significant meltdown within the sector. 

The three stages of collapse

Burry’s analysis has specifically focused on the threat that Bitcoin's collapse poses to Strategy's firms. He has specified three price levels that would mark different stages of the potential fallout.  

If Bitcoin drops below $70,000, this would result in hefty losses across the industry. Michael Saylor's Strategy would likely record over $4 billion in losses.

Burry believes the firm would "find capital markets essentially closed." 

Should Bitcoin fall to $60,000, Burry warns of an "existential crisis" for Saylor’s firm. Burry pointed to Strategy's mNAV, a key metric tracking the company’s stock price relative to its Bitcoin holdings.

Strategy currently sits at an mNAV of 1.1. Last year, the firm's CEO suggested that if this metric drops below 1, they might be forced to sell Bitcoin as a "last resort." 

A drop to $50,000 would break the backbone of the crypto ecosystem. This represents Burry's worst-case scenario. 

"The Lincoln tunnel"

On Tuesday, BTC collapsed to an intraday low of $73,111, according to CoinGecko data. However, the bleeding has stopped at least for now.

Jim Cramer, CNBC's most famous anchor, has reacted to the bounce with a reference to Stephen King’s post-apocalyptic novel The Stand.

In the book, the character Larry Underwood must escape a plague-ridden New York City by walking through the Lincoln Tunnel. 

Cramer is saying the recent market action was a harrowing journey through darkness. 

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