"The Big Short" Protagonist Michael Burry Warns "Bitcoin..." [Weekend Money]

Three-Stage Bitcoin Downside Scenario
Below 50,000 Dollars, Risk of Virtual Asset Industry Collapse

Michael Burry, the real-life protagonist of the movie "The Big Short," has presented a three-stage downside scenario for Bitcoin. His analysis suggests that whenever the Bitcoin price falls below certain thresholds, the risk could spread beyond a simple price correction to threaten the survival of individual companies and the broader industry ecosystem.

According to iM Securities, the first inflection point Burry mentioned is when Bitcoin falls below 70,000 dollars. Once it enters this range, valuation losses at Bitcoin-holding companies (DAT) start to become visible. The total debt of DAT companies that hold Bitcoin as an asset is about 56 billion dollars. This is overwhelmingly higher compared to the debt of Ethereum-based companies, which stands at about 483.7 million dollars. Burry warned that because the group of Bitcoin-holding companies is highly leveraged, they could be hit directly by credit risk and rising refinancing costs if the price declines.

If Bitcoin loses the 60,000 dollar level, the risk is elevated to an issue of "survival." A price drop leads to a reduction in collateral value, which in turn triggers margin calls that demand additional collateral or force involuntary asset sales. Ultimately, there is a high likelihood of falling into a classic downward spiral of "price decline → collateral value decline → forced selling."

However, Yang Hyunkyung, a researcher at iM Securities, said, "In the case of the DAT corporate strategy, there is either a put option for early redemption on the convertible bonds or a considerable period remaining until maturity, so it is difficult to see an immediate default trigger arising in the short term," adding, "It is hard to assume an excessive short-term liquidity crisis, but for other DAT companies that do not have the same financial buffers, there is still a possibility that survival risks will materialize during a price-down phase."

The final third stage, when Bitcoin falls below 50,000 dollars, implies a risk of collapse for the entire industry ecosystem. This is because mining companies, whose cost structures have a high proportion of fixed costs, are increasingly likely to go bankrupt as pressure on mining margins intensifies. If mining companies dump large amounts of the Bitcoin they hold onto the market to secure operating funds, selling pressure will increase further. Burry pointed out that during this process, buying interest across the digital asset market, including gold-tokenized assets, could disappear, and the shock could spread beyond digital markets to a decline in real asset prices.