Silver-linked liquidations briefly eclipsed bitcoin during last week’s crypto sell-off, an unusual flip that showed how tokenized commodities and leverage can turn crypto venues into 24/7 macro trading hubs.

Hedge fund manager Michael Burry, known for “The Big Short,” pointed to the same dynamic in a note this week, calling it a “collateral death spiral” in which falling crypto prices and heavy leverage forced liquidations in tokenized metals alongside digital assets.

Burry said silver liquidations exceeded bitcoin on at least one crypto venue during the unwind.

“Sky high leverage on these crypto exchanges due to rising metals prices meant that as the crypto collateral fell, the tokenized metals had to be sold," he said. "This is a collateral death spiral."

"It was reported that tokenized silver futures liquidations actually exceeded Bitcoin liquidations on one crypto market called, ironically, Hyperliquid," Burry added.

That reversal was driven less by anything specific to bitcoin than by fast-moving positioning in metals, where a sharp pullback collided with crowded leverage and thin liquidity.

At the peak of the move, tokenized silver futures logged one of the largest wipeouts across crypto markets, overtaking the usual leaders bitcoin and ether.

Tokenized metals contracts let traders take directional bets on gold, silver and copper using crypto-native platforms rather than traditional futures accounts.

These products trade around the clock and often require less upfront capital, which can make them attractive in volatile conditions. But that same setup can accelerate forced selling when prices move against a crowded trade.

As metals rolled over, leveraged longs were forced to unwind. Liquidations surged as traders either failed to meet margin requirements or saw positions automatically closed by platforms.

On Hyperliquid, one of the most active venues for these instruments, silver-linked liquidations briefly exceeded bitcoin’s — a rare moment where a macro contract, not BTC, became the main driver of forced selling.

The move also came as traditional markets tightened risk parameters.

CME Group raised margin requirements for gold and silver futures, increasing collateral demands and pressuring leveraged traders to either add capital or cut exposure.

While those margin changes apply to CME contracts, traders say shifts in positioning and risk appetite can spill quickly into tokenized markets that mirror the same underlying assets.

The broader takeaway is that crypto venues are no longer used only for crypto. They’re increasingly becoming alternative rails for macro trades — and in stress, that can flip the liquidation tables in ways traders don’t expect.