The major cryptocurrency Bitcoin has had an absolutely horrible start to the year. The digital token has plummeted almost 14 percent so far in 2026, and almost 40 percent since hitting all-time highs of well over $120,000 in October — its longest losing streak since 2018. It’s down almost three percent today alone.
It’s a wakeup call to anyone who made major investments in crypto betting on a more lenient and light-on-regulation market during president Donald Trump’s second term. The White House established its own “Strategic Bitcoin Reserve,” a stockpile made up of Bitcoin holdings mainly from seized assets, and Trump has enriched himself enormously with a series of crypto-related business moves.
To Michael Burry, the man who famously shorted the US housing market before its collapse in 2008, it could be a sign of an impending disaster. In a Substack post this week, Burry warned that further losses for Bitcoin could put a major strain on the balance sheets of investors that overindexed on crypto, leading to further selloffs and a “death spiral” that could be difficult to recover from.
Recent corrections in gold and silver prices after their year-long rallies could be connected to Bitcoin’s woes, Burry argued, since metals futures aren’t backed by physical assets, not unlike crypto tokens.
“Sickening scenarios have now come within reach,” Burry wrote, fretting that another ten percent drop in Bitcoin could prove disastrous for the world’s largest crypto treasury, Strategy Inc., pushing some who are mining the token closer to bankruptcy.
Burry’s warning comes amid turbulent times on Wall Street. The US dollar reached a four-year low earlier this year as investors look abroad for safer bets. The Trump administration’s shaky monetary policy has made foreign investments, particularly in Europe, far more tempting.
All of that uncertainty has caused the value of gold to make major leaps, hitting an all-time high of over $5,500 per ounce last week. Cryptocurrencies, meanwhile, are quickly losing their appeal, dropping below $73,000 last week.
“There is no organic use case reason for Bitcoin to slow or stop its descent,” Burry wrote in his Substack post.
In case the nosediving cryptocurrency were to drop below $70,000, Burry warned that the financial industry could incur heavy losses. Below $50,000, and miners could be forced to close up shop, accompanied by a catastrophic sell-off for precious metals like gold.
“Tokenized metals futures would collapse into a black hole with no buyer,” he wrote. “Physical metals may break from the trend on safe haven demand.”
Whether Burry’s bearish stance on the matter will end up accurately predicting a major “death spiral”-like collapse remains to be seen. He has a long track record of criticizing cryptocurrencies for being worthless and comparing them to the tulip crisis of the 1600s.
His track record is shaky, though. Following his famous shorting of the 2008 housing crisis, the hedge fund manager has also made plenty of wrong calls over the years.
But given the massive investments well over 150 public companies have made in Bitcoin, the token’s recent downturn could indeed foreshadow difficult days ahead as investors desperately try to cut their losses.
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