Skip to main content
  1. Home
  2. Culture

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

By

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.

Related

“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.

Editors’ Recommendations

Matthew Denis
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…
Everything we know about Max’s The Pitt so far: Cast, plot, and teaser trailer
Noah Wyle returns to the hospital room in new drama
the pitt season 1 ep 102 sc 4

The most popular genres of TV shows gain and lose popularity at a whirling rate. The family sitcom took over the 1980s and 1990s. The antihero era was the dominant one of the 2010s. Superhero shows and sci-fi hits seem to be the main category for fans streaming right now. There are specific types of shows that seem to endure throughout every decade, though, and the medical drama is one of them.

Max has the latest offering in medical fare, which is titled The Pitt. Named after the city of Pittsburgh, the show stars Noah Wyle and an ensemble cast of other doctors and nurses who partake in the usual struggles and roller coaster events that take place inside one of Pennsylvania's hospitals. We have everything you need to know about The Pitt right here, from the cast list to the latest teaser trailer released by Max.
Who is starring in The Pitt?

Read more
Timothee Chalamet apparently lost out on franchise roles over his body type
The actor tried to gain weight, but struggled to build up a more imposing build.
Timothee Chalamet in Dune.

Few actors have had a better run of success over the past five years than Timothee Chalamet. Chalamet has become an icon even as he has continued to challenge himself in a variety of high-profile roles. With Dune, he even has a hugely successful franchise under his belt, even if it's one that's slightly more high-brow than average.

In a recent interview with Rolling Stone U.K., though, Chalamet revealed that he had been passed over for roles in films like Divergent and The Maze Runner. “I would always get the same feedback, ‘Oh, you don’t have the right body,’” he explained. “I had an agent call me once and say, ‘I’m tired of getting the same feedback. We’re gonna stop submitting you for these bigger projects because you’re not putting on weight.’ I was trying to put on weight. I couldn’t! I basically couldn’t. My metabolism or whatever the f--k couldn’t do it.”

Read more
Remember no boxes? Get this cigar gift instead and save for Black Friday
Nondescript cigar bundles for when were cigars invented.

You may remember that recently I talked about not buying cigar boxes as gifts. I stand by that for a few reasons. The biggest is that they can be expensive, even on sale, and a box includes a lot more cigars than a sampler or small bundle. That means, if you pick wrong, and it can happen, many of those cigars won't be enjoyed the way you'd want. Instead, it's best to go with a smaller sampler of five to ten cigars max. You'll still need to do a bit of research and find out what your cigar person likes to smoke. But a sampler gives them a bigger variety and you more chances to earn a hit.

Just to provide you an example, this five-cigar sampler with is only $47, normally $55. Or, the is only $77, normally $85. Each pack includes five different cigars, the perfect cigar gift. Head on over to Famous Smoke Shop to check out their big sampler sale for Black Friday and you're sure to find something in there.

Read more