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

The cryptocurrency market is no longer just "facing a challenge"—it is in the midst of a high-velocity correction. Since the late 2025 peaks, the narrative has shifted from institutional adoption to survival. With Bitcoin now plummeting to $63,473, the "Big Short" warnings from Michael Burry regarding a market "death spiral" are looking less like hyperbole and more like a roadmap.

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.

• Failure of the $68,000 Floor: The psychological and technical support at $68,400 (the 200-week EMA) has been sliced through with high volume. In technical terms, what was once a "retest" has turned into a decisive breakdown, leaving a massive gap between current prices and the next major psychological level at $60,000.
• Descending Channel Acceleration: Bitcoin is currently hugging the bottom of a steep descending channel. The red candles are lengthening, indicating that selling pressure is intensifying as buyers disappear.
• Stochastic RSI Oversold (But No Bounce): The Stochastic RSI has bottomed, indicating extremely oversold conditions. However, the price is "staying heavy" rather than bouncing, a bearish signal that the momentum is too strong for a reversal just yet.

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.