Legendary Investor Michael Burry Speaks of ‘Death Spirals’ and ‘Black Holes’

In his Feb. 2, 2026, post, dubbed “Short Thoughts: February 2, 2026,” Burry said bitcoin’s move below key levels exposed its speculative profile and undermined claims that it functions as digital gold.

He pointed to late-January liquidations tied to crypto-linked trading strategies, estimating that as much as $1 billion in gold and silver positions were unwound as bitcoin fell. Algorithmic trading and portfolio de-risking, he wrote, amplified losses, particularly in tokenized precious metals futures.

Burry has never been a fan of bitcoin—not even a little. In a conversation last December with Michael Lewis, the author of “The Big Short” who documented Burry’s legendary housing-market wager, Burry tore into bitcoin’s valuation and hype, likening it to classic market bubbles and arguing it lacks intrinsic worth as prices pushed toward the six-figure mark earlier that year.

Burry recently created a Substack called “Cassandra Unchained.”

In the interview with Lewis he zeroed in on bitcoin’s so-called criminal ties and speculative appeal, saying, “I think that bitcoin at $100,000 is the most ridiculous thing,” and adding that it is “not worth anything.” Burry then attempted to drive the point home by dubbing bitcoin as “the tulip bulb of our time,” a nod to the infamous 17th-century Dutch tulip mania.

In the latest Substack post, Burry is now warning the pressure could extend to companies heavily exposed to bitcoin, including Strategy Inc., if capital markets tighten during sustained declines. He said a drop toward $60,000 could strain mining operations, force reserve sales and reinforce a feedback loop of selling across assets.

“It looks like up to $1 billion in precious metals were liquidated at month’s very end as a result of falling crypto prices,” Burry wrote.

He added that bitcoin’s failure to act as a safe haven could worsen losses if institutions rush to sell crypto used as collateral, dragging down gold and silver futures not backed by physical metal. While physical metals could eventually decouple, Burry said tokenized markets remain vulnerable, warning that bitcoin could become “the first asset to suffer a true death spiral” if declines persist.

Also read: Bitcoin Drops to $72,863 Low After Short‑Lived Bounce Meets Heavy Selling

While Burry built his reputation by calling the 2008 crisis, many of his later forecasts have fallen flat, shaped by a stubbornly bearish streak that struggles in bull markets. He warned in 2017 of a global meltdown and even World War III, neither of which arrived as economies kept expanding.

Burry’s shorts against Tesla starting in late 2020 also backfired as the stock climbed nearly 1,000%, and his 2023 “Sell” call missed as the S&P 500 rose more than 60%. Those misreads, including faulty calls on index funds and bitcoin, show how his contrarian bets can falter when optimism takes over.

FAQ ❓

• What is Michael Burry warning about?
  He says bitcoin’s decline could trigger a feedback loop of selling that spreads into gold, silver and other markets.
• Why does Burry link bitcoin to precious metals?
  He argues algorithmic and tokenized trading strategies tie crypto moves to gold and silver futures.
• Which companies does Burry see as vulnerable?
  Firms with large bitcoin exposure, including Strategy, could face funding stress if prices keep falling.
• Are physical metals affected the same way?
  Burry suggests physical gold and silver may eventually decouple, unlike tokenized products.

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