Michael Burry, the investor known for his prescient calls during the 2008 financial crisis, detailed a history of market predictions on X Sunday, while reiterating his skepticism toward Bitcoin’s long-term viability. Burry, in a lengthy post, outlined a series of successful investment moves spanning 26 years, but also acknowledged a missed opportunity with the cryptocurrency in 2013.
According to Burry’s post, he considered purchasing Bitcoin after a meeting with a friend at Lightspeed Venture Partners but ultimately did not invest. He highlighted prior successes, including shorting Amazon.com at its peak in 2000, shifting to small-cap value stocks later that year, and acquiring Apple stock in both 1998 and 2002. He also noted early investments in Korean and Chinese stocks in 2003 and 2004, respectively, ahead of significant market gains.
Burry’s current critique of Bitcoin centers on a perceived lack of inherent utility and its inability to function as a reliable hedge against currency devaluation. He has consistently argued that the cryptocurrency’s value is primarily driven by speculation, lacking the fundamental economic purpose necessary to sustain long-term demand. This perspective contrasts with the common comparison between Bitcoin and gold, as Burry contends Bitcoin has not demonstrated the same safe-haven characteristics during periods of geopolitical instability and economic uncertainty.
He cautioned against assuming corporate adoption guarantees Bitcoin’s permanence, pointing to the approximately 200 public companies currently holding Bitcoin. Burry emphasized the accounting implications of these holdings, noting that companies are required to mark these positions to market, potentially triggering forced sales if prices continue to decline. According to Burry, risk controls could compel these companies to liquidate their Bitcoin holdings, exacerbating downward pressure on the market.
Burry’s commentary arrives as he explores the broader implications of tokenization, a trend he has expressed interest in understanding. He has observed the increasing adoption of tokenized assets by Wall Street firms, citing JPMorgan Chase &. Co.’s JPM Coin as an example of how the technology is being used to enhance client services. This interest suggests a recognition of the potential impact of tokenization on the perception of digital assets and their role in investment portfolios.
Expanding on the interconnectedness of crypto markets, Burry suggested that declines in Bitcoin have contributed to pullbacks in the prices of gold and silver. He specifically cited instances of traders and corporate treasurers selling profitable positions in tokenized gold and silver futures, even though these products are not backed by physical metal. He warned of a potential “collateral death spiral” in tokenized metals, estimating up to $1 billion in liquidations linked to Bitcoin’s weakness around month-end. He further posited that a drop in Bitcoin’s price to $50,000 could drive Bitcoin miners into bankruptcy and trigger a collapse in tokenized metals futures.
