Michael Burry predicts “the mother of all crashes” for the crypto market


“The Big Short” investor Michael Burry predicts the “mother of all crashes” for the crypto space on Twitter. Above all, leverage is a problem.

Will there be another big crash? Many people in the crypto space are likely to be asking themselves this question these days. If star investor Michael Burry has its way, the answer should be a resounding “yes”. Because, according to the American, “the mother of all crashes” is still ahead of us. On Twitter the 50-year-old announced his assessment of cryptocurrencies and certain “meme stocks”. Among other things, Burry said:


All the hype or speculation does is attract retailers before the mother of all crashes comes. #FOMO parabolas do not resolve sideways. With cryptos dropping into the trillions or meme stocks by tens of billions, #MainStreet losses will be the size of countries. The story hasn’t changed.

Michael Burry on Twitter

“Leverage is the problem”

The investor also explained in another tweet the reason for his pessimistic forecast. Leverage positions are a big problem in the crypto space. To this Burry:

If you don’t know how much leverage there is in cryptos, you don’t know anything about cryptos. No matter how much else you think you know.

Michael Burry on Twitter

Burry is best known as “The Big Short” investor in the mid-2000s. At that time, the American predicted the collapse of the real estate market and then bet against the market. His prognosis came true and the real estate crash triggered the financial crisis of 2008. Since then, Burry has been considered a nostradamus of the financial world, around whom a loyal following has gathered.

Back in March, when Bitcoin was still trading at over $ 50,000, warned Burry before a bubble formation in the industry leader. BTC is a speculative bubble that brings more risks than opportunities. Even then, he saw the leverage effect with Bitcoin as the biggest deficit.

Fund managers see Bitcoin in a bubble

Some fund managers probably also share the skepticism towards crypto currencies. At least those who were asked about Bitcoin by Bank of America. Of the 224 respondents, 81 percent said that Bitcoin was still in a bubble despite the price drop in the course of the flash crash. In addition, 72 percent of fund managers said the current inflation is temporary. According to this, the recent price pressure will subside in the course of the year and eventually return to normal levels.