Bitcoin Falls Below $64,000 After Burry Calls BTC a ‘Purely Speculative Asset’

Bitcoin slipped below the closely watched $64,000 level on Friday, deepening a sharp sell-off that has erased nearly half of its value from last year’s peak and pushed the world’s largest cryptocurrency to its weakest levels since October 2024. The drop comes as prominent investor Michael Burry warned that bitcoin has failed to behave as a hedge in times of stress, instead exposing itself as a purely speculative asset vulnerable to forced selling.

As of early Friday trading, bitcoin was changing hands near $65,700, down roughly 6.7% over the past 24 hours. The slide followed a volatile session in which prices briefly dipped close to $60,000 before staging a modest rebound. Despite the bounce, market sentiment remained fragile, with trading volumes surging and liquidation activity accelerating across major crypto exchanges, according to Bloomberg.

The renewed pressure on bitcoin coincided with fresh skepticism from Michael Burry, who cautioned that the cryptocurrency has not lived up to its reputation as a store of value. In a recent note, Burry argued that bitcoin has behaved more like a leveraged risk asset than a defensive hedge, particularly when macroeconomic conditions tighten and liquidity dries up.

“Bitcoin has been exposed as a purely speculative asset,” Burry wrote, warning that further declines could trigger a feedback loop of forced selling. He suggested that a sustained drop could strain the balance sheets of miners and corporate holders, potentially shutting off access to capital markets and amplifying losses across the crypto ecosystem.

Market data shows the sell-off has been broad-based. Ethereum, the second-largest cryptocurrency by market value, also fell sharply during Thursday’s session, extending losses to more than 13% at one point before recovering slightly. The synchronized decline across major tokens underscores the risk-off tone that has gripped digital assets in recent weeks.

Another source of pressure has come from exchange-traded funds holding bitcoin. Analysts note that many ETF investors entered the market near last year’s highs, leaving a large portion of holders sitting on unrealized losses. With average acquisition prices estimated near $90,000, ongoing redemptions have added to selling momentum as risk managers and traders move to limit further downside.

Policy signals have also weighed on sentiment. Bitcoin’s slump accelerated after comments from US Treasury officials suggested the federal government does not have the authority to purchase or back cryptocurrencies, cooling speculation that official support could emerge during periods of market stress. The remarks reinforced the view that crypto assets remain fully exposed to market forces without a safety net.

The downturn marks a sharp reversal from optimism that dominated markets earlier in the year, when investors bet that a more crypto-friendly political environment would lift prices. Instead, bitcoin is now down roughly 27% year to date, with its market capitalization shrinking to about $1.3 trillion as confidence fades.

Burry also highlighted rising correlations between bitcoin and US equities, noting that the cryptocurrency has increasingly moved in tandem with broader risk assets. That shift undermines the argument that bitcoin can provide diversification during periods of equity market stress, especially when volatility spikes simultaneously across asset classes.

Despite the sharp losses, some analysts caution that the current decline may not yet represent a definitive bottom. With positioning still stretched and macroeconomic uncertainty lingering, strategists warn that downside risks remain elevated if selling pressure from ETFs, miners, or corporate treasuries intensifies further.

For now, bitcoin’s drop below $64,000 serves as a stark reminder of how quickly sentiment can turn in digital asset markets. As investors reassess the role of cryptocurrencies in portfolios, the debate over whether bitcoin is a hedge, a technology bet, or a speculative instrument is once again front and center.