Burry says Bitcoin is behaving like a speculative trade, and not a hedge, which raises risks for companies holding massive BTC reserves.
Bitcoin’s (BTC) slide below $80,000 has intensified worries that a wider downturn in the broader crypto sector could be imminent.
Market experts believe that the recent slide in BTC’s price may not be an isolated correction, but a development that could seriously destabilize corporate balance sheets and magnify systemic risk if it continues to fall.
Major Market Casualty
Michael Burry has issued a stark warning that Bitcoin’s continued decline could erase significant value across the market, and the greatest risk is concentrated among companies that have built large corporate treasuries around the asset, which have mushroomed over the years.
In the latest Substack post following the latest crypto sell-off, “The Big Short” investor, Burry, said BTC’s drop below important technical levels opens the door to cascading stress not only within crypto markets but also across adjacent financial sectors.
He said that the world’s largest crypto asset is failing to meet a critical expectation often placed on it, that is, acting as a hedge against currency debasement. Instead, Burry said its recent behavior more closely resembles that of a speculative risk asset, particularly given its correlation with the S&P 500. He said gold and silver rallied on geopolitical uncertainty and dollar weakness, but Bitcoin did not follow those macro signals.
Burry also predicted that further downside could have severe consequences for Bitcoin treasury companies that accumulated BTC aggressively during higher price ranges. He highlighted the possibility that another 10% decline could leave major holders such as Michael Saylor’s Strategy billions of dollars underwater, and potentially cut them off from capital markets, thereby increasing bankruptcy risk.
Such outcomes, according to the investor, could amplify losses beyond individual firms and contribute to broader market fallout. Burry additionally noted that Bitcoin’s weakness has coincided with recent pressure in precious metals.
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Galaxy Digital’s Zac Prince also questioned the long-term viability of Bitcoin treasury companies, which raise capital to hold BTC on their balance sheets while promising yield. Speaking on TheStreet Roundtable, Prince said these models rely on risky financial engineering rather than BTC’s native value. He compared them to past schemes that created tokens to generate Bitcoin and said that paying a premium for such structures does not make them sustainable.
He even explained that while some firms might pivot to revenue-generating activities, many will still struggle to justify their valuations, and added that businesses should focus on real operations first and treat BTC as a treasury strategy, not the primary driver.
Optimism Wanes
Bitcoin has been under tremendous pressure, and many analysts believe that there could be more pain ahead instead of a much-anticipated recovery.
Former Binance CEO Changpeng “CZ” Zhao also said that while he had been positive about a BTC super cycle just weeks ago, current market sentiment has made him less confident. Speaking on Binance’s social platform, he highlighted the rise of fear, uncertainty, and doubt (FUD) in the community and admitted that the emotional intensity has left him uncertain about BTC’s near-term prospects.
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