‘Big short’ investor Michael Burry details possible ‘catastrophic scenarios’ as Bitcoin continues to fall.

• Michael Burry is sounding the alarm about what could happen if Bitcoin continues to slide

• In a Substack post, “The Big Short” investor outlined various consequences if BTC’s sell-off continues.

• In a worst-case scenario, Bury said he sees crypto miners going bankrupt and metals plunging.

Michael Burry is predicting a new kind of financial disaster – one that could happen if Bitcoin doesn’t break its nose.

In a new Substack post, the investor of “The Big Short” fame pointed to Bitcoin’s deep bear market and said he believes there could be dire consequences if the crypto’s price continues to fall.

His warning comes at a difficult time for bitcoin investors. The crypto ended its fourth straight month of losses in January, marking the token’s longest losing streak since 2018. The coin is also down about 37% from its peak last year.

Markets are already seeing some results from bitcoin’s rout, Burry suggested. The former fund manager said he believed last week’s drop in gold and silver prices was partly driven by the decline in bitcoin, and that metal futures contracts are not backed by physical assets the way cryptos are tokenized.

“Distress scenarios are now within reach,” Bury said, outlining three other outcomes in particular that he believes are possible if bitcoin continues its free-fall.

Here are three scenarios Bury sees:

If bitcoin falls below $70,000, there could be huge losses in the financial industry, Bury speculated.

The strategy, Michael Saylor’s iconic crypto treasury, would record more than $4 billion in losses and “find the capital markets essentially shut down,” Burry said, suggesting the firm would be unable to raise more cash from investors.

Other institutions could take a 15%-20% loss on their bitcoin holdings, forcing risk managers to “become more aggressive,” he added.

Bury said that the recent drop in gold and silver prices has made bitcoin’s fall possible.

“If these moves are sustained, Bitcoin could break $70,000 because of this interconnected world of portfolio margin accounts, tokenized metal futures, and crypto collateral,” he wrote.

If bitcoin falls to $60,000, it could cause an “existential crisis” for Seller’s strategy, Bury said, without elaborating.