Investor Michael Burry, Photo: Astrid Stawiarz / Getty Images / Profimedia
Michael Burry, the famous investor immortalized by the movie “The Big Short”, says that the excitement around bitcoin has gotten out of hand, reports Business Insider.
Burry, who rose to fame after being one of the few people to predict the 2008 US housing market crash, called the digital currency based on blockchain technology “modern-day tulipomania” in a podcast hosted by Michael Lewis, the book's author The Big Short on which the 2015 film was based.
Tulipomania refers to a period in Dutch gold rush history when contract prices for some fashionable tulip bulbs rose to dizzying prices and then suddenly collapsed in February 1637. It is generally accepted that this was the first speculative bubble in recorded history
“I think bitcoin at $100,000 is the most ridiculous thing,” said Burry, who described the world's largest cryptocurrency as “worthless.”
Bitcoin hit an all-time high in October
“It's even worse than a tulip bulb because it allowed so much criminal activity to hide deep,” Burry told Lewis, who wrote in his 2010 book about the investor's famous bet against the housing market before the financial crisis.
Bitcoin was up about 1.5% on Tuesday, reaching a price of around $88,700 for a single coin. The digital currency hit an all-time high of more than $120,000 in October, but its price has fallen by more than 30% since then.
Burry's attack on bitcoin, which recently delisted his investment fund, is the latest episode in a spectacular return to the public sphere after years of infrequent messages and cryptic social media posts under the pseudonym “Cassandra” — a reference to the priestess who, according to Greek mythology, was cursed by the god Apollo to make true prophecies that are never believed.
Michael Burry also took the world's most valuable company in his sights
Last week, Burry reiterated his warning that the US stock market is in a speculative “bubble” and said that Nvidia, the chipmaker that has gained the most from the race to develop artificial intelligence, will be the one to signal the markets to crash.
In late October, Nvidia briefly crossed the $5 trillion ($5 trillion) market capitalization mark, becoming the first company in history to be valued at such an amount.
Burry, now 54, also called Tesla “ridiculously overvalued.” He has issued regular warnings about the “AI-created bubble” on his account on the “X” platform and on his recently launched Substack channel.
But his current attack on bitcoin is not the first for Burry, who was played by Christian Bale in the film The Big Shortis critical of cryptocurrencies.
In 2021, Burry warned that while he believed bitcoin's reasons for existence were “relevant,” the cryptocurrency's rise represented a “speculative bubble” that presented more risks than opportunities.
“If you don't know how much leverage is involved in growth, you may not know enough to own it,” he wrote in a message he later deleted from the then-Twitter platform.
Leverage is a tool that allows investors to control a market position greater than their available equity, using funds borrowed from a broker or a bank. Simply put, the instrument allows the purchase of shares on debt.
