Michael Burry Warns of 'Death Spiral' as Tokenized Silver Liquidations Beat Bitcoin
Michael Burry sounded the alarm as tokenized silver futures suffered one of the steepest drops across crypto markets, with liquidation activity surpassing that seen in Bitcoin and Ether on Wednesday, Feb. 4, 2026. The unexpected severity of silver's move forced margin calls and accelerated selling in tokenized metal positions, drawing attention because these products have been marketed as a diversification play for crypto investors.
The episode matters because it underscores how tokenized real-world assets can transmit shock to crypto rails and lending pools, not just spot crypto. Traders and platforms with concentrated exposure to leveraged metal products now face elevated counterparty and liquidity risk, and risk-off flows could pressure broader markets including BTC. Market participants should watch on-chain liquidation events and lending pool health as the situation unfolds.