Can Bitcoin Crash to Zero? Analyzing Michael Burry’s Recent Warnings

The cryptocurrency market is currently facing one of its most challenging periods since the 2022 collapse. Following a massive peak in late 2025, Bitcoin has entered a sharp downward trajectory, recently slipping below the $73,000 mark. This price action has reignited a decade-old debate: Can $Bitcoin actually crash to zero? Recent comments from legendary “Big Short” investor Michael Burry have added fuel to the fire, as he warns that the current structure of the market could lead to a catastrophic “death spiral.”

Bitcoin Crash Chart: A Technical Breakdown

Looking at the recent $BTC-USD price action, the technical picture appears increasingly grim. After hitting an all-time high of $126,000 in October 2025, Bitcoin has lost nearly 40% of its value.

• Breach of Key Support: Bitcoin recently broke through the 100-week Exponential Moving Average (EMA). Historically, losing this level has led to a retest of the 200-week EMA, which currently sits around $68,400.
• The “Death Spiral” Risk: The chart shows a potential “Head and Shoulders” pattern on the higher timeframes. If the support at $68,000 fails to hold, analysts at big authority platforms like Bloomberg suggest a slide toward $40,000 or even $30,000 is mathematically on the table.
• Institutional Pressure: Large corporate holders like MicroStrategy are seeing their cost basis (around $76,000) breached. Burry argues that forced liquidations from these giants could create a feedback loop of selling that the market cannot absorb.

$BTC/USD 2H – TradingView

Michael Burry and the “Death Spiral” Theory

Michael Burry, who famously predicted the 2008 housing bubble, has recently taken to his Substack to criticize Bitcoin’s fundamental value. He argues that Bitcoin has failed as a “debasement hedge” or “digital gold,” noting that its correlation with precious metals has caused a ripple effect where gold and silver are also being liquidated to cover crypto losses.

Burry’s core argument for a “crash to zero” revolves around the lack of an organic use case. He suggests that if institutional inflows via ETFs dry up—which they have, with over $500 million in outflows in late January 2026—the “speculative bubble” will burst entirely.

Who Else Believes Bitcoin is Worthless?

Burry isn’t the only high-profile skeptic. Nassim Nicholas Taleb, author of The Black Swan, has long maintained that Bitcoin’s value is essentially zero. Taleb’s argument is based on the “absorbing barrier” theory: if there is even a small probability that an asset with no dividend yield can hit zero, its present value should be zero today.

Furthermore, skeptics point to:

• Regulatory Crackdowns: Governments could make it nearly impossible to convert $BTC back to fiat.
• Technological Obsolescence: If the network fails to scale or a superior technology emerges.
• Miner Capitulation: If the price falls below the cost of production (estimated around $50,000 for many in 2026), the network’s security could collapse.

Will Bitcoin Crash to 0$? Challenging the “Zero” Narrative

While the bearish case is loud, many experts argue that a crash to zero is virtually impossible due to the decentralized nature of the network. Even if institutional players exit, a core group of “HODLers” and global users in emerging markets provide a permanent floor of demand.

Moreover, the hardware wallet industry and self-custody movements ensure that the supply remains distributed and out of the reach of centralized “death spirals.” As long as there are two people willing to trade $BTC for a loaf of bread or another currency, the price is non-zero.

Conclusion: Is the Bottom Near?

The market is currently in a state of “extreme fear,” with the Fear & Greed index hovering around 15. While Michael Burry’s warnings about institutional liquidations are a significant risk, Bitcoin has survived 80%+ drawdowns multiple times in its history. Investors should keep a close eye on the $68,000 support level and consider using a top crypto exchange to manage their risk effectively.