‘Big Short’ Michael Burry’s Ominous Warning: Will Bitcoin Plunge to $50,000?

Legendary investor Michael Burry, who accurately predicted the 2008 global financial crisis and served as the real-life inspiration for the film The Big Short, has sent shockwaves through the market by warning of Bitcoin’s (BTC) endless decline and the possibility of a death spiral. He cautioned that the current situation, in which Bitcoin’s value has been cut in half from its peak, may not represent the worst-case scenario, strongly urging investors to regain composure and reassess their portfolio allocations.

According to Yahoo Finance on February 13 (local time), Burry recently delivered a pessimistic outlook to his subscribers, predicting that the world’s largest cryptocurrency faces stronger headwinds ahead. Citing data from Barron’s, Bitcoin has plunged nearly 50% from its high four months ago, wiping out approximately $1 trillion in market capitalization. However, Burry assessed that the current wave of selling resembles past downturns and that the true bottom has yet to arrive.

The key reason behind Burry’s conviction of further declines is forced liquidation driven by margin calls. The digital asset market is heavily leveraged, meaning panic selling can trigger a chain reaction of steep drops. In fact, data from CoinGlass shows that $2.65 billion worth of futures positions were forcibly liquidated in a single day. He also argued that Bitcoin lacks intrinsic utility in the real economy or any meaningful organic use case, describing it as a purely speculative asset.

The survival crisis facing miners was also identified as a serious flashpoint. Burry warned that if Bitcoin falls to the $50,000 level, most miners could face bankruptcy. In such a scenario, the disappearance of buyers could even trigger a cascading collapse in tokenized metals futures markets, according to his analysis.

Amid these risks, Burry advised investors not to make hasty decisions driven by anxiety but to step back and take a deep breath. Research by Nobel Prize–winning economists suggests that people experience far greater psychological pain from losses than pleasure from equivalent gains, making them more prone to costly mistakes in a state of panic. If investors cannot withstand further market corrections, he added, they should consider rebalancing their portfolios with the help of a financial advisor.

However, he noted that those who believe in Bitcoin’s long-term vision do not need to exit the market solely due to price volatility, as the asset has endured numerous cycles of sharp rises and falls since its inception. Like most asset management experts, Burry emphasized that given Bitcoin’s historical volatility, the safest investment strategy is to limit cryptocurrency exposure to a modest 5% to 10% of an overall portfolio.

Disclaimer: This article is for investment reference purposes only and the publisher is not responsible for any investment losses incurred based on its content. The information provided should be interpreted for informational purposes only.