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

By: blockbeats|2026/02/04 13:00:01

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

On March 16, 2026, in Dallas, Texas, USA, CanGu Company (New York Stock Exchange code: CANG, hereinafter referred to as "CanGu" or the "Company") today announced its unaudited financial performance for the fourth quarter and full year ended December 31, 2025. As a btc-42">bitcoin mining enterprise relying on a globally operated layout and dedicated to building an integrated energy and AI computing power platform, CanGu is actively advancing its business transformation and infrastructure development.

2025 Full Year and Fourth Quarter Financial and Operational Highlights

• Financial Performance:

Total revenue for the full year 2025 was $688.1 million, with $179.5 million in the fourth quarter.

Bitcoin mining business revenue for the full year was $675.5 million, with $172.4 million in the fourth quarter.

Full-year adjusted EBITDA was $24.5 million, while the fourth quarter was -$156.3 million.

• Mining Operations and Costs:

A total of 6,594.6 bitcoins were mined throughout the year, averaging 18.07 bitcoins per day; of which 1,718.3 bitcoins were mined in the fourth quarter, averaging 18.68 bitcoins per day.

The average mining cost for the full year (excluding miner depreciation) was $79,707 per bitcoin, and for the fourth quarter, it was $84,552;

The all-in sustaining costs were $97,272 and $106,251 per bitcoin, respectively.

As of the end of December 2025, the company has cumulatively produced 7,528.4 bitcoins since entering the bitcoin mining business.

• Strategic Progress:

The company has completed the termination of the American Depositary Receipt (ADR) program and transitioned to a direct listing on the NYSE to enhance information transparency and align with its strategic direction, with a long-term goal of expanding its investor base.

CEO Paul Yu stated: "2025 marked the company's first full year as a bitcoin mining enterprise, characterized by rapid execution and structural reshaping. We completed a comprehensive adjustment of our asset system and established a globally distributed mining network. Additionally, the company introduced a new management team, further strengthening our capabilities and competitive advantage in the digital asset and energy infrastructure space. The completion of the NYSE direct listing and USD pricing also signifies our transformation into a global AI infrastructure company."

"As we enter 2026, the company will continue to optimize its balance sheet structure and enhance operational efficiency and cost resilience through adjustments to the miner portfolio. At the same time, we are advancing our strategic transformation into an AI infrastructure provider. Leveraging EcoHash, we will utilize our capabilities in scalable computing power and energy networks to provide cost-effective AI inference solutions. The relevant site transformations and product development are progressing simultaneously, and the company is well-positioned to sustain its execution in the new phase."

The company's Chief Financial Officer, Michael Zhang, stated: "By 2025, the company is expected to achieve significant revenue growth through its scaled mining operations. Despite recording a net loss of $452.8 million from ongoing operations, mainly due to one-time transformation costs and market-driven fair value adjustments, the company, from a financial perspective, will reduce its leverage, optimize its Bitcoin reserve strategy and liquidity management, introduce new capital to strengthen its financial position, and seize investment opportunities in high-potential areas such as AI infrastructure while navigating market volatility."

Fourth Quarter 2025 Ongoing Operations Financial Performance

Revenue

The total revenue for the fourth quarter was $1.795 billion. Of this, the Bitcoin mining business contributed $1.724 billion in revenue, generating 1,718.3 Bitcoins during the quarter. Revenue from the international automobile trading business was $4.8 million.

Operating Costs and Expenses

The total operating costs and expenses for the fourth quarter amounted to $4.56 billion, primarily attributed to expenses related to the Bitcoin mining business, as well as impairment of mining machines and fair value losses on Bitcoin collateral receivables.

This includes:

· Cost of Revenue (excluding depreciation): $1.553 billion

· Cost of Revenue (depreciation): $38.1 million

· Operating Expenses: $9.9 million (including related-party expenses of $1.1 million)

· Mining Machine Impairment Loss: $81.4 million

· Fair Value Loss on Bitcoin Collateral Receivables: $171.4 million

Profit Situation

The operating loss for the fourth quarter was $276.6 million, a significant increase from a loss of $0.7 million in the same period of 2024, primarily due to the downward trend in Bitcoin prices.

The net loss from ongoing operations was $285 million, compared to a net profit of $2.4 million in the same period last year.

The adjusted EBITDA was -$156.3 million, compared to $2.4 million in the same period last year.

Full Year 2025 Ongoing Operations Financial Performance

Revenue

The total revenue for the full year was $6.881 billion. Of this, the revenue from the Bitcoin mining business was $6.755 billion, with a total output of 6,594.6 Bitcoins for the year. Revenue from the international automobile trading business was $9.8 million.

Operating Costs and Expenses

The total annual operating costs and expenses amount to $1.1 billion.

Specifically, they include:

· Revenue Cost (excluding depreciation): $543.3 million

· Revenue Cost (depreciation): $116.6 million

· Operating Expenses: $28.9 million (including related-party expenses of $1.1 million)

· Miner Impairment Loss: $338.3 million

· Bitcoin Collateral Receivable Fair Value Change Loss: $96.5 million

Profitability

The full-year operating loss is $437.1 million. The continuing operations net loss is $452.8 million, while in 2024, there was a net profit of $4.8 million.

The 2025 non-GAAP adjusted net profit is $24.5 million (compared to $5.7 million in 2024). This measure does not include share-based compensation expenses; refer to "Use of Non-GAAP Financial Measures" for details.

Financial Position

As of December 31, 2025, the company's key assets and liabilities are as follows:

· Cash and Cash Equivalents: $41.2 million

· Bitcoin Collateral Receivable (Non-current, related party): $663.0 million

· Miner Net Value: $248.7 million

· Long-Term Debt (related party): $557.6 million

In February 2026, the company sold 4,451 bitcoins and repaid a portion of related-party long-term debt to reduce financial leverage and optimize the asset-liability structure.

Stock Repurchase

As per the stock repurchase plan disclosed on March 13, 2025, as of December 31, 2025, the company had repurchased a total of 890,155 shares of Class A common stock for approximately $1.2 million.

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