Michael Burry is well known for the housing bubble he accurately predicted. He made billions of dollars when the entire market thought that he was wrong. That is the sole reason when he says Bitcoin is a “speculative bubble” it does make me worry a bit. Even though I am quite bullish about BTC in the long run, these comments make me question my understanding of the market. Also, note that this is not the first time that he talked about Bitcoin being a bubble.
Is Bitcoin a “speculative bubble”?
Michael talked about why those who are bullish about Bitcoin think it is relevant. But the cryptocurreny posses more risk than benefits, according to him. Burry specifically used the word debt that was also very important during the housing bubble in 2007. He said that people had taken dangerous amounts of debts that could lead to an ultimate crash. He also said, “If you do not know how much leverage is involved in the run-up, you may not know enough to own it.”
And it’s not just Bitcoin. Micheal also compared the Electric vehicles, SaaS, meme stocks like Gamestop and AMC to the bubble of 2007. He thinks that the entire Bitcoin scenario is not going to last for much longer, and when it falls from heights, it will be painful. Many companies will be buried to the ground, while some will take huge losses. The fact that Bitcoin’s growth is being driven by speculation is the main problem.
He also said that many think he is out of touch with the market. And to that, he says that they are not considering the fact that they have all things even before. Micheal has been clearly saying tough on his bearish stance at the market. Another thing that Burry was worried about Bitcoin is the long-term aspects of the cryptocurreny. He thinks that the government might take strict action against it because it is a big threat to their currencies. Micheal also clearly mentioned that he doesn’t hate Bitcoin but is not confident about it either.
Bitcoin’s recovery
After Elon Musk tweeted that Bitcoin and Etherium’s prices seem high, they dropped by more than 20% in just one week. The currency saw the worst weekly loss since March 2020 and at the same time started recovering from that point. Just two days back, Bitcoin went as low as $43,000 and now its being steady at $49,000. The market has recovered quite a bit but it is still $9,000 behind it’s all-time high. It seems that once Bitcoin crosses that milestone once again, we could see it reach new heights again. But for investors it is important to consider both sides of the coin and so analyzing Michael’s comments are important.
What are your thoughts on Micheal Burry calling Bitcoin a “speculative bubble”? Let us know in the comments below. Also, if you found our content informative do like and share it with your friends.
Also Read: China bans crypto mining due to huge power consumption
