Michael Burry – the man, the myth, the Twitter ghost – has become something of an eccentric legend in financial circles.
A neurologist-turned-hedge-fund manager, Burry is best known for his leading role in the subprime mortgage crisis drama – not the meltdown itself, but for predicting it and profiting from the chaos in spectacular fashion.
His prophecy made him the protagonist of ‘The Big Short,’ both a book and an Oscar-winning film where he was played by none other than Batman himself: Christian Bale.
The nickname ‘Big Short’ has stuck to him like glue since then. Yet, while Burry has shorted everything from water to Tesla, he has conspicuously never put his money where his mouth is when it comes to Bitcoin.
Famed for his cryptic tweets, Burry has never shied away from voicing his skeptical views on Bitcoin.
The irony is as rich as a slice of birthday cake. The man is renowned for deleting tweets faster than a regretful teenager after a night on the hard cider. He called Bitcoin a bubble – yet he has never shorted it.
After declaring, “My warning is your opportunity” and telling everyone to “sell,” he mysteriously deleted his Twitter account. A classic Burry cliffhanger, if you will.
Notable among his Bitcoin criticisms is his public spat with Elon Musk. Elon might just be the only person who can rival him in the race for the most controversial Twitter persona.
After Musk’s Tesla made a whopping $1.5 billion investment in Bitcoin, Burry was quick to call it an “irresponsible” move. But despite his warnings, Burry has never acted against Bitcoin in the financial market. The question we’re left wondering is: Where is the ‘Big Short’ on Bitcoin, Burry?
What Does Michael Burry Think About Bitcoin?
The Buried Tweets of Burry
Let’s play a game of Twitter archaeology, shall we? After all, Michael Burry’s deleted tweets are akin to fossilized amber, preserving prehistoric insects of financial insight.
Tracking down his Bitcoin opinions has proven as elusive as hunting down an endangered species, but we’ve been lucky to recover some specimens. Thank goodness for internet historians and @BurryArchive.
In February 2021, Burry made an inflation prophecy, tweeting that governments would “squash competitors in the currency arena,” according to Business Insider.
His warning included gold and our favorite decentralized digital currency, Bitcoin. In this cryptic prediction, we see the shadow of government intervention looming:
“In an inflationary crisis, governments will move to squash competitors in the currency arena. $BTC #gold”
A classic Burry ‘sky is falling’ scenario or a logical prediction?
A month later, in March 2021, as reported by Bloomberg TV, Burry cast his gaze toward the stars of the market.
His targets? The darlings of the decade – Bitcoin, electric vehicles, SAAS, and meme stocks. Labeling them as ‘fads’, he compared them to the ill-fated housing bubble of 2007 and the dot com bubble of 1999:
“If you do not know how much leverage is involved in the run-up, you may not know enough to own it”
“Fads today (#BTC, #EV, SAAS #memestocks) are like housing in 2007 and fiber/.com/comm/routers in 1999”
“Chinese regulators summon Tesla on quality issues as consumers complain about quality…but $TSLA bought $BTC,” Burry said. “In my mind’s eye, so much #digitalconfetti.”
Was this simply a light-hearted jab at Elon Musk, or was Burry hinting at a deeper, potentially problematic connection between the two? As Business Insider reports, Burry quickly cleared this up:
“$TSLA and $BTC correlation coefficient is 0.951967 over the last six months, @elonmusk going for perfect unity? Nah, Elon dreams the impossible. He is determined to break unity. Correlation > 1. And he has history on his side. $TSLA and $BTC investors can make anything happen.”
Fast forward to June 2021, and we find a (now deleted) tweet that screams classic Burry. “Sell.” That’s it. That’s the tweet. An ominous single-worded caution, like a raven cawing in a storm.
But what were we supposed to sell? Bitcoin? Stocks? Our souls? Unfortunately, we were left in the dark as the tweet disappeared, and Burry’s account soon followed.
In July 2022, Burry reappeared from his Twitter hiatus to drop a cryptic hint. He suggested that Bitcoin’s correction was halfway through, implying there could still be rough waters ahead:
“Adjusted for inflation, 2022 first-half S&P 500 down 25-26%, and the Nasdaq down 34-35%, Bitcoin down 64-65%. That was multiple compression. Next up, earnings compression. So, maybe halfway there”
With Bitcoin’s volatility well known, it’s no surprise Burry was stirring the pot. But how accurate was this half-baked prediction? Spoiler: not very.
Big Short, Big Tweets, But No Big Bitcoin – An In-depth Dissection of Burry’s Bitcoin Commentary
In the complex world of Bitcoin, opinions often contradict, but Burry’s views stand out with a distinct flavor of skepticism. Through this exploration, we aim not just to understand the man’s perspective but to provide a broader lens for understanding Bitcoin’s current and future challenges.
Bitcoin vs The State
Michael Burry has always been one to zag when everyone else zigs. So, it came as no surprise when his February 2021 tweet painted a picture of Bitcoin and gold squaring off against governments in an inflationary duel.
It’s an engaging narrative, echoing the timeless battle between decentralized disruptors and centralized powerhouses. But could the government actually ban bitcoin to save its own currency? It’s highly unlikely in Western democracies.
In Burry’s predictive panorama, governments, stirred by inflationary specters, lash out to “squash competitors in the currency arena.” However, in this Orwellian tale, Bitcoin isn’t the white knight bravely warding off the inflationary dragon. Instead, it’s a potential casualty in the governmental fight to maintain their monetary sovereignty.
Let’s go a bit more granular, shall we? Bitcoin – in all its decentralized glory, finite supply, and global accessibility – is frequently hailed as an insurance policy against inflation. It’s the ‘digital gold’ for a new age, standing firm in the face of fiscal instability. But Burry’s tweet challenges this almost mythical narrative.
His crystal ball envisions governments clamping down, brandishing regulatory cudgels and legal traps. An extreme scenario could see a total ban on Bitcoin, akin to India’s brief but dramatic foray into prohibition (later reversed), or severe restrictions, as witnessed in China.
It’s not all doom and gloom. Bitcoin, by its very design, is a resilient beast. Its borderless nature and accessibility to anyone with an internet connection, whether through peer-to-peer trading or a wide variety of global exchanges.
So what we see is that even countries like Russia, China, India, and others have tried to ban bitcoin, they have reversed the decision. As it stands, only Kuwait has banned all bitcoin activities, and this was only done recently as of July 2023. How long will it last?
More importantly, does the US consider itself on the same playing field as Kuwait, or are we an open society were people have free choice of investment?
An outright ban is unlikely, but there could be more restricted regulations on exchanges that make it harder to acquire bitcoin for the average person. Even if that becomes the case, Bitcoin trading could still persist in some form or another with peer to peer trading networks like Peach, Bisq, Robosats, and others that would surely pop up. It’s like trying to stop a tidal wave with a sieve.
Moreover, Burry’s scenario overlooks one key fact: Bitcoin is the people’s currency. The more governments try to suppress it, the more it could galvanize people’s desire for financial freedom and bolster Bitcoin’s appeal. Don’t underestimate the Streisand Effect.
So, while Burry’s narrative underlines an intriguing tension between financial autonomy and governmental control, Bitcoin isn’t about to roll over and play dead. As it stands in this high-stakes monetary poker game, Bitcoin isn’t just holding its cards close, it’s doubling down.
The Bitcoin Bubble And Leverage Buying
If there’s one thing that Michael Burry is decidedly unimpressed with, it’s speculation. And Bitcoin, in his eyes, appears to be the poster child for this risky game.
This theme resonates in his March 2021 tweet, where he compared Bitcoin to the ill-fated market ‘fads’ of the past, such as housing in 2007 and the dot-com bubble in 1999.
Bitcoin, precariously poised atop a market bubble, is like a mountain climber unaware of the avalanche about to unfurl below.
Burry’s key concern lies in the murky waters of leverage. “If you do not know how much leverage is involved in the run-up,” he admonishes, “you may not know enough to own it.”
What’s he getting at here? It’s the old adage: leverage amplifies profits, but it also turbocharges losses. And in the high-octane world of Bitcoin trading, leverage is akin to adding nitrous oxide to your Toyota Corolla.
In a market where movements can be dramatic and unexpected, leveraged positions can quickly turn from potential gold mines into explosive landmines.
This raises a critical question: Are Bitcoiners adequately aware of the leverage that underpins its value? And if they’re not, is their blind faith a slippery slope leading to a potential market crash?
But let’s not get too carried away here. Yes, leverage can inflate bubbles, but does that mean Bitcoin itself is intrinsically speculative?
Many Bitcoin advocates would beg to differ. They argue that Bitcoin has genuine, tangible value driven by its unique attributes of decentralization, security, and finite supply. To them, it’s not just another tulip mania. It’s a paradigm shift in the way we perceive and handle money.
As it turns out, Burry seemed to be right about bitcoin peaking at an all time high in 2021. Although we later has a second run up and bitcoiners during that time made sure Burry knew he was wrong about predicting a price crash, he later turned out to be right. The second price run that topped the previous one in 2021 is now unanimously seen “fake” rally induced by market manipulators (instead of spot buyers).
It’s hard to admit it, but Burry was right about the price action.
Where he’s wrong is the value that bitcoin brings to the table investors, and though bitcoin’s price crashed, it’s now the best performing asset of 2023, and it’s certainly not dead.
Disentangling the Bitcoin-Tesla Tango
February 2021 saw Michael Burry in top form, delivering another one of his now-infamous zingers. This time, his crosshairs were trained on Bitcoin and Tesla. His observation? A rather peculiar correlation between the two.
Burry seemed to suggest that Tesla’s Bitcoin investment was a deflection, a sleight of hand to draw attention away from Tesla’s quality issues in China. It was a bold accusation, painting a picture of two market behemoths caught in a high-stakes tango.
But is this dance as choreographed as Burry implies? Let’s investigate.
Correlation does not imply causation – it’s a principle we’ve all learned in Statistics 101. Just because Bitcoin and Tesla prices were moving in sync doesn’t mean one is puppeteering the other.
Yet, the timing of Tesla’s Bitcoin investment does raise an eyebrow. Announced amidst quality complaints from the Chinese market, it’s easy to be seduced by Burry’s theory of diversionary tactics.
However, diving deeper, we see a more nuanced picture. Elon Musk, Tesla’s CEO, is known for his pro-Bitcoin stance. Tesla’s Bitcoin purchase could be a strategic move to embrace a digital future rather than a calculated distraction.
Furthermore, Tesla has since sold a portion of its Bitcoin holdings, citing a desire to prove the liquidity of Bitcoin, even as its stock price continued its roller-coaster ride.
The narrative is further complicated by the fact that correlation can be fleeting. A six-month dance does not make a lifelong partnership. Market dynamics are complex and ever-changing. What was true yesterday may not hold tomorrow.
More compelling evidence of Bitcoin’s complex dance card emerges when we consider its relationship with the broader stock market. Traditionally, the digital asset has often moved in tandem with stocks, particularly in times of market stress.
However, in a twist of the tale, recent data from the final quarter of 2022 reveals that this correlation is actually decreasing. Bitcoin is breaking away from the crowd.
The reduced correlation with the stock market signals a maturing asset class, carving its own path independently of traditional equities. This phenomenon could be attributed to a number of factors, including interest rates, institutional buying, the upcoming ETF, not the least to mention broader adoption by retail investors.
So, while Burry points out the Bitcoin-Tesla correlation with the zeal of a detective unveiling a plot twist, let’s not lose sight of the broader narrative. Bitcoin may be related to an asset class or particular stock for a period of time, but Bitcoin is on its own journey.
Burry on Bitcoin’s Correction Phase
There’s a certain thrill to roller coasters, isn’t there? The rush of adrenaline, the fear and anticipation. Well, if Michael Burry’s July 2022 tweet is anything to go by, Bitcoin holders may be in for one hell of a ride.
Burry hinted at a significant correction phase for Bitcoin, painting a somewhat grim picture: “Bitcoin down 64-65%,” he noted. To add to the drama, he suggested that this was merely the halfway point of the correction.
That’s a pretty gloomy forecast, especially coming from a man known for his uncannily accurate predictions. But as seasoned Bitcoin holders would say, “Been there, done that.”
You see, Bitcoin’s history is fraught with corrections and rebounds. Each peak is followed by a trough, and every surge is shadowed by a dip.
This kind of volatility is part and parcel of the Bitcoin adventure. But is Burry’s predicted correction just another bump in the road, or are we heading for a cliff-edge?
As always, perspective is key. Bitcoin is not alone in this bearish turn. As Burry pointed out, the S&P 500 and the Nasdaq were also significantly down. It seems the entire market was caught in a correction whirlwind.
However, it’s essential to remember what makes Bitcoin stand out in this scenario. Unlike traditional stocks, Bitcoin’s reason for existence isn’t its profitability or dividend payouts. Instead, it’s a vehicle for decentralization, a hedge against inflation, and a digital store of value.
These are factors that remain true, regardless of price dips or spikes.
Correction phases, as painful as they may be, are often part and parcel of a healthy market cycle. They serve to cool off overheated markets, wiping out speculative froth and setting the stage for more sustainable growth.
Yes, Burry’s forecast may seem daunting, but if Bitcoin’s history has taught us anything, it’s this: while the winds of the market can be unpredictable, the resilience of Bitcoin should never be underestimated.
Burry versus Bitcoiners: A Clash of Titans
Like any influential figure, Michael Burry’s remarks have been met with varied reactions from the Bitcoin community.
While some consider his warnings a sobering reality check, others see it as a testament to Bitcoin’s enduring resilience.
So let’s dive into these electrifying exchanges.
Though not directly related to bitcoin, let’s first establish that Burry is not some kind of infallible savant when it comes to market calls. He’s been very correct at times, and very incorrect at other times. Making money trading the market is about asset allocation and strategy, not just betting it all on one big bet.
Point in case, he was wrong about the broader market experience a major downturn in 2023. In fact, he’s been wrong so many times lately, a Jerome Powell parody account has named him the new “Cramer”, AKA Jim Cramer, who is famously wrong about everything.
Adding to this chorus of skeptics, Reshab Agarwal of TechStory.in noted Burry’s conspicuous reluctance to short Bitcoin himself:
“It has been confirmed by Michael Burry himself that he is not shorting BTC. He said this upon asking on Twitter, how to short crypto. The fact that he is called the big short and is not short on crypto is a big deal. It shows that even he knows Bitcoin has the potential to rise much higher from here. His recent statements to CNBC also showed that he thinks crypto is in a bubble and most people do not understand it well. When the price of BTC was $30k, he said it was a good time to short it. But he never personally shorted it.”
For a man known as ‘the big short,’ Burry sure seems hesitant to bet against the digital asset. Is it a grudging acknowledgment of Bitcoin’s potential, or just a sly hedge? We’ll let you decide.
But the pièce de résistance has to be Elon Musk’s reaction. Following Burry’s comments on Tesla’s Bitcoin investment, Musk dubbed him a “Broken Clock.”
It’s a reminder that in the world of Bitcoin, every opinion, every prediction, is up for fierce debate. After all, what’s a little friendly banter between millionaires?
It’s evident that the Bitcoin community isn’t taking Burry’s prophecies lying down. In the face of criticism, they continue to demonstrate faith in Bitcoin’s resilience and potential.
Burry has certainly thrown his hat into the ring with his cautionary words, but Bitcoiners are not easily deterred. They ride the waves of volatility with unwavering conviction, buoyed by the belief in Bitcoin’s transformative potential.
So, will Burry be the prophet of Bitcoin’s downfall, or just another naysayer proved wrong? My bet is on the latter.
My Thoughts On Burry And Bitcoin
Though nobody likes to hear that their favorite investment is hitting a euphoric zone and about to crash, it turns out he was right in this case. Bitcoin did crash. Not as hard as he predicted, but it did. 2021 was the peak bitcoin price.
Lately, he’s been talking about market bottoms (screenshot here, article here), which some bitcoiners have taken as bullish sentiment on the price of bitcoin. Actually, he hasn’t mentioned bitcoin at all lately. He may be bullish on the broader market, but bitcoin is out of the conversation.
Which is something I like about Burry. He doesn’t seem married to his predictions, and doesn’t seem hyper focused on bitcoin. Unlike someone like Peter Schiff, who has been an bitcoin engagement troll for over a decade and consistently wrong about its price action, Burry seems content to have been right about the 2021 crash, and will update us when he has more to say.
Burry may not be a mega bitcoin bull, and he may not even get what bitcoin actually purports to do, but he’s certainly not an “enemy of bitcoin”. He simply called out an overleveraged market and testosterone-filled Bitcoin Twitter didn’t like it.
All that being said, since he has nothing to add to the conversation about bitcoin, he’s not worth listening to at this point with regards to any opinions about bitcoin itself. I never recommend basing your bitcoin buying habits on Tweets, so I wouldn’t even put much credence into what he has to say about the market sentiment.