Big Short investor Michael Blurry warns of the coming Bitcoin crash, calling it a “speculative bubble.” He is certain of this because of the outrageous surge in Bitcoin price and how buyers are being compelled to take on huge amounts of debt to invest.
“#BTC is a speculative bubble that poses more risk than opportunity despite most of the proponents being correct in their arguments for why it is relevant at this point in history,” Blurry wrote before deleting the tweet. “If you do not know how much leverage is involved in the run-up, you may not know enough to own it.”
Burry is nicknamed “The Big Short” for his known billion-dollar bet on the mid-2000s housing market crash which he chronicled in his book.
The Scion Asset Management leader in a tweet on Saturday compared the rally around bitcoin, GameStop stock, AMC stock, electric vehicles, and software-as-a-service companies to the housing and dot-com bubbles. He admitted that the buzz around these assets are making waves, but he doesn’t expect it to last any longer.
“On the whole, not wrong, just driven by speculative fervor to insane heights from which the fall will be dramatic and painful,” Burry said.
“Those saying me and Munger and Singer are so out of touch are not considering that we have seen this all before, and not just once,” he said about similar warnings by Warren Buffet’s business partner, Charlie Munger, and hedge fund billionaire Paul Singer.
Burry, in another tweet, describes the market as “dancing on a knife’s edge.” In February he said that he had no resentments against Bitcoin but was very doubtful about its long-term prospects. He also said that it would only be a matter of time when authorities stop threats to cryptocurrencies and launch their digital currencies.
The Big Short investor said he wasn’t short bitcoin, as “anything possible” in the nearest future, but was short Tesla in December. He cashed out his GameStop shares last quarter after preparing the ground for its stock price to spike in January.