Recently, the price of Bitcoin has continued to fall, dropping over the weekend to its lowest level since last year’s “tariff shock.” On Tuesday, it briefly fell below $73,000, erasing all gains since Trump’s re-election in November 2024. Data shows that Bitcoin touched a low of $72,949.94 in the past 24 hours, marking a 15-month low. Although it subsequently rebounded above $76,000, the overall trend remains weak.
Prominent investor and “Big Short” figure Michael Burry recently issued a stern warning, pointing out that Bitcoin’s price has fallen below multiple key technical levels. This could trigger a chain reaction, leading to massive value evaporation and “contaminating” the broader financial markets. Burry believes that Bitcoin is essentially a “pure speculative asset” and does not truly possess the safe-haven function of hedging against currency depreciation, unlike precious metals such as gold and silver. This view contradicts the long-held logic of supporters that its “fixed supply makes it comparable to gold.” He warned that if Bitcoin falls another 10%, some publicly traded companies with aggressive Bitcoin holdings, such as MicroStrategy (MSTR), could face billions in unrealized losses, and their access to financing could be severely restricted.
Since hitting its all-time high in early October last year, Bitcoin has accumulated a decline of over 40%. Analysis points to slowing fund inflows, shrinking market liquidity, and diminishing appeal of the macro narrative as the main reasons for this round of decline. Additionally, some cryptocurrency market traders shifting to prediction markets and event betting platforms has also reduced the overall heat in the token economy. Notably, Bitcoin has not benefited from a weaker US dollar or rising geopolitical risks. Instead, its trend has diverged from that of traditional safe-haven assets. Recent record highs in gold and silver prices have further weakened the core narrative of Bitcoin as an “anti-inflationary asset.”
Selling pressure continues to spread in the cryptocurrency market: Ethereum and Solana fell by 9.6% and 7.1% respectively at one point in the past 24 hours, dropping to $2,118 and $97.10. These levels are already below the market bottom from last April and represent drawdowns of 57% and 67% from their 2025 highs, respectively. CoinGlass data shows that liquidations in the cryptocurrency market over the past 24 hours amounted to a staggering $659 million, with Bitcoin long positions accounting for approximately $234 million, making it the primary source of liquidations.
Burry further pointed out that the launch of Bitcoin ETFs has not only strengthened its speculative attributes but also enhanced its correlation with the stock market. The correlation between Bitcoin and the S&P 500 index has recently approached 0.50. Concurrently, Bitcoin spot ETFs experienced their largest single-day net outflow since last November at the end of January, marking the third large-scale capital withdrawal within just 10 days. Despite this, some market views hold that the overall scale of crypto assets remains limited. Bitcoin’s current market capitalization is below $1.5 trillion, and exposure within household and corporate sectors is relatively narrow. Therefore, its wealth effect might still be within a controllable range.
However, Burry warned that if Bitcoin continues to fall below key levels, it could force corporate risk management departments to sell off assets and spill over into derivative markets such as “tokenized precious metals futures.” He believes that the recent pullback in gold and silver prices is partly due to the deleveraging of speculative funds triggered by the decline in the cryptocurrency market, forming a “collateral death spiral.” Burry emphasized that if Bitcoin were to fall to $50,000, mining companies could face large-scale bankruptcies, and tokenized metal futures lacking physical backing might fall into a “situation with no buyers.”
