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Michael Burry, the founder of Scion Capital who predicted the 2008 global financial crisis, noted that Bitcoin has become a “source of a chain reaction” affecting not only altcoins but also traditional assets such as gold and silver.
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Burry argues that a further significant decline in Bitcoin could lead to the collapse of companies that hold the leading cryptocurrency on their balance sheets, increasing pressure from their creditors. The expert believes that gold and silver are no longer isolated from the crypto market: increasing correlation makes precious metals participants in the chain reaction, a scenario previously considered unlikely.
“Bitcoin has not lived up to expectations as a safe haven and an alternative to gold. The idea that corporate holders can provide it with long-term support is not viable. Miners risk facing bankruptcy, and the futures market for precious metals could find itself in a dead end without buyers,” Burry stated.
According to the hedge fund founder, the main problem with Bitcoin is that it remains a speculative asset without intrinsic value or broad utility. Old risk assessment models are no longer relevant, and a sharp decline in one major asset can trigger a reaction affecting both cryptocurrencies and the stock market, summarized the founder of Scion Capital.
Previously, Matt Hougan, investment director at Bitwise, a crypto asset management company, stated that the current downturn in the crypto market is not a short-term price correction but a true crypto winter.
