Michael Burry Compares Bitcoin to One of the Biggest Bubbles in History

Core Viewpoint - Bitcoin is a highly polarizing asset, with some investors believing it will soar to over $1 million, while others, like Michael Burry, predict a crash, comparing it to historical speculative bubbles like tulip mania [1][2]. Group 1: Historical Comparison - Michael Burry likens Bitcoin to the tulip mania of the 17th century, suggesting that the hype surrounding Bitcoin is reminiscent of the irrational demand for tulip bulbs that ultimately led to a market crash [2][4]. - The tulip mania serves as a classic example of rampant speculation, where demand surged uncontrollably before collapsing, causing economic turmoil [4][5]. - Burry argues that Bitcoin's valuation is even more unsustainable than tulip bulbs, as it has facilitated significant criminal activity, further complicating its legitimacy as an investment [6]. Group 2: Speculation and Investment Risks - While Bitcoin's rise has spanned over a decade, distinguishing it from the short-lived tulip bubble, the speculative nature of Bitcoin still poses significant risks to investors [7]. - The concept of speculation is tied to the "greater fool theory," where investors buy assets hoping to sell them to someone less informed, leading to potential volatility and financial loss [8]. - Burry's perspective emphasizes that speculation, rather than informed investing, can result in substantial risks, regardless of the asset in question [8].