Skip to main content

Big Short’s Michael Burry reveals why crypto’s problems aren’t going away

Burry anticipated the crypto collapse the same way he did the real estate crash

In news of the “Duh” variety, mega investor Michael Burry has been on record over the past year advising people to get out of the crypto market. A 77% drop in Bitcoin value in the last year (per Fortune) and FTX’s $32 billion crash (per Barron’s) seem to indicate that the financial seer might have been on the right track.

Burry is already famous for his prominent role in Michael Lewis’ The Big Short (and subsequent portrayal by Christian Bale in the subsequent Adam McKay film) as the man who shorted a booming real estate market before its 2008 crash almost caused another Great Depression. In 2022, Burry followed his doomsday prophecy for real estate with another prediction: the crypto crash.

Michael Burry sketch.
InsiderMonkey.com

Yahoo Finance reported that Burry cautioned investors that the crypto market was experiencing the “greatest speculative bubble of all time in all things,” and that the “mother of all crashes” was on the horizon for cryptocurrency investors. Crypto is designed to be an alternative to big banks, a translucent financial instrument that operates outside of the mainstream, allowing individuals, organizations, and governments access to capital funding that’s not overseen by fat cat bankers. Turns out, there’s just as much greed and corruption in unregulated markets as there is in those supposed to be overseen by the United States Securities and Exchange Commission.

Recommended Videos

Why was Barry able to predict this when investors from BlackRock to El Salvador’s President Nayib Bukele weren’t? The answer is avarice and obstinance in the face of doubters, exemplified by the acronym FUD — fear, uncertainty, and doubt. Doubters were silenced as doomsayers, neophyte Cassandras who knew nothing about the blockchain or the cresting digital wave. Unfortunately, those who claimed that cryptocurrency prices would only continue to climb are now crushed under the weight of their own hubris.

“The very acronym FUD served to minimize the folly in which so many engage,” Burry posted on Twitter on Nov. 8. “No matter how logical an argument, if contrary to the bullish narrative, it deserved scorn as FUD. Well. Well. Well.”

https://twitter.com/michaeljburryBC/status/1590122322434084867?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1590122322434084867%7Ctwgr%5E465d5ebd1ccccc60b7f904ce8f5effc3884a9641%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.thestreet.com%2Finvesting%2Fcryptocurrency%2Fbig-short-michael-burry-says-crypto-crash-has-one-reason

According to The Street, Burry also tweeted, “The problem with #crypto, as in most things, is the leverage. If you don’t know how much leverage is in crypto, you don’t know anything about crypto, no matter how much else you think you know.”

Not only did Burry bail on crypto, but foresaw the massive tech correction that would follow. According to a 13F disclosure (a required quarterly report from investment managers) filed by Burry’s Scion Asset Management with the SEC on August 15, the hedge fund dumped around $292 million worth of shares of tech giants like Apple and Meta and pharmaceuticals megaliths Bristol-Myers Squibb. Noting that President Biden hired 87,000 new IRS agents, Burry reinvested a portion of those funds in a private prison company.

Michael Burry selling everything and buying a large position in a private prison company after seeing the IRS is hiring 87,000 new agents pic.twitter.com/lT5ny4SdlC

— Wall Street Memes (@wallstmemes) August 15, 2022

Investors who have yet to lose their pants (or are at least trying to keep their undergarments) might do well to heed Burry’s advice and get out of the way while big tech adjusts to a dwindling post-pandemic demand and the SEC/federal legislators sort out how to regulate crypto markets.

Matthew Denis
Former Digital Trends Contributor
Matt Denis is an on-the-go remote multimedia reporter, exploring arts, culture, and the existential in the Pacific Northwest…
8 gripping shows like The Recruit you should watch next
These shows don't have Noah Centineo, but they're still thrilling
Netflix on a laptop

If there's one type of show Netflix has thoroughly mastered, it's anything adjacent to the spy/CIA/thriller/undercover genre. There are so many adventure series in this vein that they all start to blend into each other. Right as people were just wrapping up binging The Night Agent, Netflix had The Recruit ready to go. Noah Centineo stars as an inexperienced CIA lawyer who thinks he's got his career under control until someone with dirt on him starts to extort the CIA.

There's nothing inherently unique about The Recruit, but that doesn't mean it's not one of the most enjoyable watches on the streaming service this month. This thriller is like a good bag of potato chips. It's TV junk food that tastes great and helps with the afternoon munchies. If you're looking for a similarly constructed and themed series, these are the shows like The Recruit to watch next.

Read more
This patio heater is $194 off — don’t let the cold keep you inside
The EDX 48,000 BTU Propane Patio Heater set up outdoors.

Even if you've set up your outdoor space with the best patio furniture, you won't be able to enjoy it if it's too cold. That's why you're going to need something like the EDX 48,000 BTU Propane Patio Heater, which is on sale from Walmart with a huge $194 discount on its sticker price of $300. You'll only have to pay $106, which is a very affordable price for this essential device. You need to hurry though, as we're not sure how much time is remaining on this offer.

Why you should buy the EDX 48,000 BTU Propane Patio Heater
If you've always wanted to transform your patio into an urban oasis or a winter wonderland, one of the most important considerations is how to make outdoor temperatures more manageable. You can do that with the EDX 48,000 BTU Propane Patio Heater, which features a double-layer heating grid made of stainless steel that provides additional durability over single-layer burners. Once you turn it on, the 48,000 BTUs of heating power kicks in, heating its surrounding space with an 18-foot diameter in as fast as one minute. You'll also be able to easily move the EDX 48,000 BTU Propane Patio Heater with its bottom wheels, which will be helpful if there are multiple areas that need to be heated in your outdoor space.

Read more
Scarlett Johansson has wanted to be in a ‘Jurassic Park’ movie for years
Jurassic World Rebirth appears to be a dream come true for the Avengers actress
Scarlett Johansson and Jonathan Bailey in Jurassic World Rebirth

Scarlett Johansson is one of the stars of Jurassic World Rebirth, and to hear her tell it, she's been waiting for this moment for years. In a recent interview with Vanity Fair, Johansson spent years sending rumors of new Jurassic Park movies to her agents because she was simply that desperate to join the franchise.

“I was really crazy about the [original] film, and I slept in a Jurassic Park pup tent in my bedroom I shared with my sister for a year,” Johansson said about her enduring love for the franchise. “Anytime the trades would report a new ‘Jurassic’ movie, I would forward to my agents like, ‘Hey, I’m available.’”

Read more