Burry: Bitcoin Decline Threatens Firms Holding BTC Treasuries
Investor Michael Burry warned that Bitcoin’s slide below key technical levels raises existential risks for companies that built large corporate treasuries of BTC. In a Substack post, Burry argued Bitcoin is behaving like a speculative risk asset — correlated with equities — rather than a hedge against currency debasement, noting it failed to rally with gold and silver on macro uncertainty. He said further declines (another ~10%) could leave major holders such as MicroStrategy materially underwater, potentially cutting them off from capital markets and increasing bankruptcy risk, which could amplify losses across markets. Galaxy Digital’s Zac Prince also criticized Bitcoin-treasury business models as reliant on risky financial engineering rather than sustainable operations. Former Binance CEO Changpeng Zhao said market sentiment has soured, reducing confidence in a near-term BTC supercycle. The article highlights growing skepticism about BTC-as-treasury strategies and warns traders to watch corporate balance sheets, BTC correlation with equities, and liquidity risk for large holders.
Bearish
The news raises near-term downside risk for BTC and the broader market. Warnings from Michael Burry and critiques from industry figures like Zac Prince and CZ highlight two concrete pressures: (1) price-driven solvency and liquidity risk among firms that hold large BTC treasuries, and (2) increased correlation with equities that reduces Bitcoin’s diversification value. If major holders face margin calls, capital-market access loss, or forced selling, that can cascade into amplified sell pressure and volatility — a bearish feedback loop for short-to-medium term trading. Historically, forced liquidation events and balance-sheet stress (e.g., Terra/Luna collapse, 2022 crypto winter) produced sharp, prolonged drawdowns and contagion across crypto firms. In the longer term, the market could reprice corporate treasury strategies and see rotation into on-chain revenue models or diversified balance sheets; that would be neutral-to-moderately constructive if it reduces systemic leverage. For traders: short-term: elevated downside risk, watch liquidations, funding rates, and corporate disclosures. Long-term: monitor changes in corporate treasury strategies and BTC’s correlation with equities to reassess hedging and allocation.