What could trigger the collapse of precious metals according to Michael Burry

Michael Burry, the legendary investor whose story is told in “The Big Short,” has issued a new warning about what could trigger a wave of massive liquidations in the precious metals markets. According to Burry, the ongoing weakening of Bitcoin could be the catalyst for forced sales of gold and silver totaling up to $1 billion.

Bitcoin Crash and Chain Reaction

The sudden plunge of the main cryptocurrency creates a dangerous situation for related markets. With Bitcoin now trading at $66,280, well below the previous resistance of $73,000, the investor highlights how this decline exposes the asset’s structural weaknesses. When prices fall so drastically, institutional investors and corporate CFOs are forced to seek new sources of liquidity, and this liquidation often impacts traditional markets such as precious metals.

The Real Risk for Companies Holding Bitcoin

Burry emphasizes an even more serious danger: if Bitcoin’s price drops to $50,000, many companies that have accumulated significant cryptocurrency reserves could face financial difficulties, with some mining firms potentially at risk of bankruptcy. This cascade of balance sheet failures could trigger a widespread rush to sell alternative assets, including precious metals, to cover losses.

Criticism of Bitcoin’s Speculative Drivers

The core issue in Burry’s view concerns the very foundation of Bitcoin’s recent appreciation. The analyst argues that the recent rise has been primarily driven by ETF flows rather than genuine mass adoption and solid economic fundamentals. Burry claims that Bitcoin has not lived up to its promises as a digital safe haven or as an alternative to gold. The rise fueled by structured financial products, he says, is therefore a sign of a speculative bubble, not a genuine evolution in the global financial system.