Michael warns of the next financial crisis: the "death spiral" of tokenized silver futures

New Warning from Investor Who Predicted the 2008 Crisis

Investor Michael Burry, known for accurately predicting the 2008 financial crisis, is warning about new risks emerging in the cryptocurrency market. The focus this time is on a phenomenon called the “death spiral” lurking in the tokenized silver futures market. The crisis pointed out by Michael suggests structural issues beyond mere market fluctuations.

Due to his track record of precise predictions during past financial crises, Michael’s insights are highly regarded among investors and market participants. Especially in the emerging field of cryptocurrencies, his warnings carry significant weight and credibility.

Risks of the Death Spiral Accelerating in the Crypto Market

According to analysis by NS3.AI, recent liquidation events in the tokenized silver futures market have resulted in losses that far exceed those seen in mainstream cryptocurrencies like Bitcoin and Ethereum. This phenomenon indicates more than just a price decline; it suggests the potential for a chain reaction of adverse effects across the entire market.

The “death spiral” that Michael warns about refers to a vicious cycle where liquidation pressure causes further price drops, which in turn trigger more liquidations. Because this mechanism is characteristic of tokenized assets and involves rapid movements, it poses a risk of unfolding at an accelerated pace compared to traditional markets.

Rapidly Increasing Volatility in Tokenized Assets

Currently, there is a rapid rise in interest in tokenized assets that digitize traditional commodities such as silver. However, this new asset class faces challenges related to liquidity fragility and high volatility.

Michael’s warning raises fundamental questions about the resilience of the systems underlying these tokenized assets. If leverage trading accelerates, the risk of contagion spreading throughout the entire market becomes unavoidable.