"Big Short" Michael Burry flags “death spiral” after silver liquidations beat bitcoin

Hedge fund manager Michael Burry, famous for "The Big Short," highlighted a "collateral death spiral" occurring in crypto markets, specifically noting that tokenized silver futures liquidations briefly exceeded those of Bitcoin on the Hyperliquid exchange. Burry explained that high leverage combined with falling crypto collateral forced the sale of tokenized metals. Tokenized metals contracts allow traders to bet on assets like silver using crypto platforms, offering 24/7 trading and lower upfront capital, but this structure accelerates forced selling during sharp pullbacks. This event was driven by a rapid metals pullback colliding with crowded leverage and thin liquidity, signaling that crypto venues are increasingly becoming alternative rails for macro trades, which can lead to unexpected liquidation dynamics during market stress.

(Source：CoinDesk)