Big Short Investor Says Bitcoin Is In a Speculative Bubble

There are plenty of Bitcoin bulls evangelizing the digital currency these days, but Michael Burry, the focus of the film and book The Big Short, is not one of them.

Burry, in a now-deleted tweet, warned that Bitcoin’s current levels are unsustainable—and current investors could suffer significant losses.

“$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,” he wrote. “If you do not know how much leverage is involved in the run-up, you may not know enough to own it.”

Burry knows about bubbles, having made a fortune off the housing market’s collapse in 2007. And he warned that Bitcoin’s recent ascension seemed reminiscent of that time.

“Fads today (#BTC, #EV, SAAS #memestocks) are like housing in 2007 and fiber/.com/comm/routers in 1999,” he said.

Burry regularly deletes his tweets, but he has been quite outspoken on the platform about a number of issues. Last April he decried the coronavirus lockdown. He began tweeting last March, and his comments are closely watched by the financial community, though he does not talk much (if at all) about his own investments.

His bearish remarks come at roughly the same time that Citi gave Bitcoin a boost. A note from analysts at the financial institution said the cybercurrency could be on the verge of going mainstream, despite the many obstacles in its path.

“But weighing these potential hurdles against the opportunities leads to the conclusion that Bitcoin is at a tipping point and we could be at the start of massive transformation of cryptocurrency into the mainstream,” the analysts said.

While Elon Musk spent Sunday taking potshots at Sen. Bernie Sanders on Twitter, the Tesla founder became the target of a different kind of financial heavy hitter on social media.

Michael Burry, the celebrity investor who rose to fame by being one of the first to profit from the subprime mortgage crisis (and whose story was told in the film The Big Short), surfaced on Twitter over the weekend to accuse Musk of seeking attention solely to sell his company’s stock.

In a now-deleted Tweet (a frequent habit of Burry’s), the investor wrote, “Let’s face it. @elonmusk borrowed against 88.3 million shares, sold all his mansions, moved to Texas, and is asking @BernieSanders whether he should sell more stock. He doesn’t need cash. He just wants to sell $TSLA.”

Burry, in a separate (also deleted) Tweet on Monday, showed a chart of Tesla’s share price with an arrow pointing to the date when Musk said that the company’s stock was trading “too high.” (At the time, Twitter shares were trading at $55.22. In early trading Monday, they were at $53.46.)

The salvos against Musk come just a month after Burry deleted his Twitter account after denouncing what he called U.S. class warfare and disputing the argument that the wealthiest 1% don’t pay enough taxes. It was hardly the first time he has left Twitter and since rejoined. Burry’s social media presence is akin to a game of Whac-a-Mole.

Musk, on Sunday, dinged Sanders, replying to the Vermont senator’s tweet demanding that the extremely wealthy pay more in taxes. “I keep forgetting that you’re still alive,” Musk wrote, along with “Bernie is a taker, not a maker.”

Burry, however, has had Musk in his sights before this most recent war of words. On Friday, he scolded the billionaire for his comments about competitor Rivian, in which Musk said the company’s true test would be achieving high production and breaking even on cash flow.

“No, @elonmusk, the true test is achieving that without massive government and electricity subsidies on the backs of taxpayers who don’t own your cars,” Burry replied.

Burry, it’s worth noting, made a huge bet against Tesla earlier this year. Burry’s Scion Asset Management owned bearish puts against 800,100 shares of the electric-car maker as of March 31. The puts give Scion the right to sell Tesla shares on or before an unidentified

Source: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble


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