「The Big Short」 Burry Warns: Bitcoin to Drop Another 10%, Triggering Systemic Risk

By: blockbeats|2026/02/04 13:00:01
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Original Article Title: "‘Big Short’ Burry: Bitcoin Down 40%, Another 10% Drop Could Have ‘Catastrophic Consequences’"
Original Article Author: Zhao Ying, Wall Street News

Michael Burry, known for successfully predicting the 2008 U.S. real estate market crash in "The Big Short," has warned that Bitcoin has already plummeted 40%, and if it continues to drop, it could cause lasting damage to companies that have hoarded this asset over the past year. He believes Bitcoin has proven to be a purely speculative asset and has failed to become a hedge like precious metals.

In an article published on Substack on Monday, Burry pointed out that if Bitcoin were to drop another 10%, one of the most aggressive Bitcoin-holding companies, Strategy Inc., would suffer billions of dollars in losses and likely be unable to access the capital markets. He cautioned that a Bitcoin decline could trigger "catastrophic consequences," spreading to broader markets and leading to a "collateral death spiral" in tokenized metal futures.

As this warning was issued, Bitcoin continued its sharp decline on Tuesday, briefly dropping below $73,000, wiping out all gains since Trump's reelection in November 2024. Since hitting a historic high in early October, this cryptocurrency has fallen over 40%.

「The Big Short」 Burry Warns: Bitcoin to Drop Another 10%, Triggering Systemic Risk

Despite Burry's warning, the cryptocurrency market remains relatively small and is unlikely to cause widespread contagion. With Bitcoin's market cap below $1.5 trillion, limited household ownership, and narrow corporate adoption, any wealth effect is likely to remain manageable.

Bitcoin Exposes Speculative Nature, Fails to Be a Safe Haven Asset

In the article, Burry pointed out that Bitcoin has not responded to typical driving factors such as a weak dollar or geopolitical risks, while gold and silver have hit historic highs due to concerns about dollar devaluation stemming from global tensions. "Bitcoin has no organic reason to slow its decline or stop it," Burry stated.

According to Bloomberg, analysts attribute the Bitcoin decline to multiple factors, including vanishing inflows, liquidity shrinkage, and a broad loss of macro allure. Many native cryptocurrency traders have also cooled on the token economy as predictions markets rise in prominence shifting to event betting.

Bitcoin fell to its lowest level since last year's tariff-induced turmoil over the weekend and continued to drop on Tuesday. This performance contrasts sharply with the arguments of its long-standing supporters, who believed Bitcoin's fixed supply made it comparable to gold.

Treasury Companies Under Tremendous Pressure

Burry warned that Bitcoin adoption by corporate treasuries and the launch of new cryptocurrency spot exchange-traded funds (ETFs) are insufficient to indefinitely support its price and prevent catastrophic consequences in a significant downturn. He noted that nearly 200 publicly traded companies hold Bitcoin.

While this has helped expand demand, "inventory asset is not permanent," he wrote. Inventory assets must be marked to market value and included in financial reports. If the Bitcoin price continues to drop, risk management officers will start advising their companies to sell.

Burry specifically mentioned that if Bitcoin were to drop another 10%, Strategy Inc., the most aggressive Bitcoin inventory company, would face losses in the billions of dollars and find capital markets essentially closed to it. He described these "vomit-inducing scenarios as now within reach."

ETFs Exacerbating Speculation and Increasing Market Correlation

Burry added that the advent of spot ETFs has only exacerbated Bitcoin's speculative nature while also increasing the token's correlation with the stock market. He wrote that Bitcoin's correlation with the S&P 500 index recently approached 0.50. In theory, when short positions start building, liquidation will actively kick in.

Burry pointed out that since late November, Bitcoin ETFs have been setting some of the largest single-day outflow records, with three occurrences in the last 10 days of January.

This trend indicates that institutional investors' confidence in Bitcoin is waning, and ETFs, originally seen as a tool to expand Bitcoin adoption, may instead accelerate selling in a market downturn.

Warning of "Collateral Death Spiral" Risk

As Bitcoin continues to break below certain key levels, Burry believes it is spilling over into the broader market. He noted that the cryptocurrency's decline is partly responsible for recent gold and silver meltdowns as corporate treasurers and speculators need to lower risk by selling profit positions in tokenized gold and silver futures.

These tokenized metal futures are not backed by actual physical metal and could overwhelm physical metal trading, leading to a "collateral death spiral," he said.

"It appears that at month-end, up to $1 billion in precious metals were liquidated due to cryptocurrency price declines," Burry wrote. If Bitcoin drops to $50,000, miners will go bankrupt, and "tokenized metal futures will collapse into a buyer-less black hole," he stated.

Nevertheless, some market observers point out that past crashes — from Terra to FTX — have failed to infect the traditional market. Bulls now point to regulatory clarity and cheap valuations as potential fuel for another rebound. But Burry's warning underscores the systemic risk that Bitcoin as a corporate treasury asset poses.

Original Article Link

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On March 4, 2026, DDC Enterprise Limited (NYSE American: DDC) today announced preliminary, unaudited full-year financial performance for the year ended December 31, 2025. The company expects to achieve record revenue and record positive adjusted EBITDA, primarily driven by continued growth in its core consumer food business and overall margin improvement. The final audited financial report is expected to be released in mid-April 2026.


2025 Full-Year Financial Highlights


Revenue: Expected to be between $39 million and $41 million, reaching a new company high.


Organic Growth: Excluding the impact of the company's strategic contraction of its U.S. operations, core revenue is expected to grow 11% to 17% year over year.


Gross Profit Margin: Expected to be between 28% and 30%, reflecting continued operational efficiency improvements.


Adjusted EBITDA: The company expects to achieve a positive full-year result in 2025, a significant improvement from a $3.5 million loss in 2024, mainly due to rigorous cost controls and a higher-margin sales mix.


Core Consumer Food Business Performance


In 2025, DDC's core consumer food business maintained strong operational performance.


The company also disclosed Core Consumer Food Business Adjusted EBITDA, a metric that further excludes costs related to its Bitcoin reserve strategy and non-cash fair value adjustments related to its Bitcoin holdings from adjusted EBITDA to more accurately reflect the core business performance.


In 2025, Core Consumer Food Business Adjusted EBITDA is expected to be between $5.5 million and $6 million.


Bitcoin Reserve Update


In the first half of 2025, DDC initiated a long-term Bitcoin accumulation strategy, holding Bitcoin as its primary reserve asset.


As of December 31, 2025: The company holds 1,183 BTC.


As of February 28, 2026: Holdings increased to 2,118 BTC


Today's additional purchase of 65 BTC brings the company's total holdings to 2,183 BTC


DDC Founder, Chairman, and CEO Norma Chu stated, "We are proud to have closed 2025 with record revenue and positive adjusted EBITDA, demonstrating the steady growth of the company's consumer food business and the ongoing improvement in profitability. We are building a disciplined, growth-oriented food platform and strategically allocating capital to Bitcoin assets with a long-term view, aligning with our core beliefs. We believe that this dual-track model of 'Steady Consumer Business + Strategic Bitcoin Reserve' will help DDC create lasting long-term value for shareholders."


Adjusted EBITDA Definition
For the full year 2025, the company defines "Adjusted EBITDA" (a non-GAAP financial measure) as: Net income / (loss) excluding the following items:· Interest expense· Taxes· Foreign exchange gains/losses· Long-lived asset impairment· Depreciation and amortization· Non-cash fair value changes related to financial instruments (including Bitcoin holdings)· Stock-based compensation


About DDC Enterprise Limited


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