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Michael Burry is an investor who, despite having no real estate background, could see through the illusion of the booming housing market in 2007.
He predicted its collapse.
The 2015 film “The Big Short” tells how he uncovered the truth behind the toxic financial products created by bankers and financiers.
The loans and mortgages were given to financially unstable households and people with poor credit.
He shorted the market and profited from one the most significant financial crashes in recorded history, managing to net $100 million in personal profits and another $700 million for his investors.
Michael Burry is known for speaking his mind and having a solid reputation in the financial world. His opinion carries significant weight, and you should pay attention to what he’s saying about the crypto market, given his track record.
As a Bitcoin investor, you’ll know how easy it is to get caught up in the hype and excitement because it’s still a very new, rapidly growing digital asset in the grand scheme.
The potential for your high returns can make it easy to overlook potential risks and put the blinkers on any alternative views.
You would have heard it a million times before, no investment is without risk, and it’s always wise to consider multiple perspectives before making a decision.
In the long term, Burry says that decentralised cryptocurrencies may have difficulty surviving in a world where governments are powerful and want to control currencies.
In the short term, anything is possible, so he’s not currently betting against Bitcoin or placing any bet on Bitcoin.
Michael Burry — Source
“I don’t hate $BTC.
However, in my view, the long-term future is tenuous for decentralised crypto in a world of legally violent, heartless centralised governments with #lifeblood interests in monopolies on currencies.
In the short run, anything is possible — why I am not short #BTC.”
Burry is saying that Bitcoin is a risky investment that is currently overvalued.
Even though some people may have valid arguments for its importance, he believes that the risks outweigh the potential benefits.
He also warns that you need to fully understand how the value of Bitcoin is being affected by people borrowing money to invest in it.
If you don’t understand this, he suggests not investing.
Michael Burry — Source
“$BTC is a speculative bubble that poses more risk than opportunity despite most proponents being correct in their arguments for why it is relevant at this point in history.
If you do not know how much leverage is involved in the run-up, you may not know enough to own it.”
Bitcoin’s Recent Recovery Is Tricking You.
Michael Burry never follows the crowd.
He’s an investor who’s built a reputation for being a critical thinker. He’s not one to jump on the bandwagon just because everyone else is doing it.
Instead, you often see him step back and understand an investment before putting his money into it.
He’s fearless in questioning the hype and excitement. Some will argue that’s all Bitcoin is, a giant Ponzi.
Burry is now saying the drop in Inflation is tricking you.
If the cost of goods and services goes up (Inflation), the value of Bitcoin will usually decrease. On the other hand, if the price of goods and services stays the same or goes down, the value of Bitcoin will usually increase significantly because it usually results in the Federal Reserve or other central banks lowering interest rates.
Michael Burry says that Inflation has reached its highest point, but it’s not the final peak in this cycle.
He predicts the Consumer Price Index (CPI) will (CPI) drop, potentially becoming negative, in the second half of 2023, and the US will fall into a recession.
The Consumer Price Index, or CPI, measures how much the prices of things people buy, like food and clothes, increased or decreased over a certain period.
It tracks the cost of living changes and can indicate inflation or deflation.
Burry believes that the Federal Reserve will lower interest rates and the government will implement stimulus measures, leading to another spike in Inflation, and it’s obvious to predict.
Michael Burry — Source
“Inflation peaked.
But it is not the last peak of this cycle.
We are likely to see CPI lower, possibly negative in 2H 2023, and the US in recession by any definition. Fed will cut, and the government will stimulate.
And we will have another inflation spike. It’s not hard.”
Michael Burry believes that Inflation can change suddenly and unexpectedly.
This can affect the value of Bitcoin.
He says that when Inflation goes up, the value of Bitcoin decreases, and when it goes down, the value of Bitcoin increases.
Burry also warns that Inflation can come back unexpectedly, and neither the President nor the Federal Reserve will take the credit.
It will cause fluctuations in the value of Bitcoin.
Michael Burry — Source
“Inflation appears in spikes.
When the spike resolves, it won’t be because of Biden or Powell.
It will be because that is the essence, the nature of Inflation.
It resolves, fools people and then comes back. When it comes back, neither the POTUS nor the Fed will take credit.”
Burry says the recent recovery in hype and speculation in cryptocurrency is attracting everyday retail investors and predicts the value of cryptocurrency could fall significantly.
He warns that when the market falls, it will cause losses that affect the size of countries and notes that history tends to repeat itself.
Michael Burry — Source
“All hype/speculation is doing is drawing in retail before the mother of all crashes.
When crypto falls from trillions, or meme stocks fall from tens of billions, #MainStreet losses will affect countries’ size.
History ain’t changed.”
Final Thoughts
No investment is without risk.
You never think that being in the Bitcoin community with an “up only” mentality.
I like exploring alternative views even if I don’t share the same opinion.
Michael Burry is expressing concerns about the long-term future of decentralised crypto because governments have a vested interest in maintaining control over currencies.
He’s pointed out the potential risks and drawbacks of investing in Bitcoin mainly because of the lack of regulation.
Despite the recent rise in the value of Bitcoin, the recovery of $5 billion by FTX, and the decrease in inflation, Burry is warning that it won’t last and that inflation will come back again.
This article is for informational purposes only; it should not be considered financial, tax or legal advice. You can consult a financial professional before making any significant financial decisions.
This article is for informational purposes only; it should not be considered financial, tax or legal advice. You can consult a financial professional before making any significant financial decisions.