‘Big Short’ Investor Who Predicted the 2008 Market Crash Has Stark Warning for Bitcoin: What Investors Should Do Next

Core Insights - Michael Burry, known for predicting the 2008 housing crash, warns of further declines in bitcoin, which has lost $1 trillion in value recently and nearly 50% from its peak four months ago [1][2] Group 1: Market Conditions - Burry draws parallels between the current bitcoin selloff and previous market downturns, suggesting that investors have not yet seen the worst of the situation and warns of a potential "death spiral" for the cryptocurrency [2] - A significant factor contributing to the decline is forced selling due to high leverage in the digital asset market, with $2.65 billion in futures positions liquidated in one day [3] Group 2: Bitcoin's Utility and Miners - Burry argues that bitcoin lacks substantive utility and is primarily a speculative asset with "no organic use case," which may lead to further price declines [3] - He warns that if bitcoin's price drops to $50,000, most miners could face bankruptcy, potentially leading to a collapse in the market for tokenized metal futures due to a lack of buyers [3] Group 3: Investor Guidance - Investors are advised to take a step back and reassess their positions, especially if they cannot tolerate another major correction, indicating a need for portfolio rebalancing [4] - Long-term investors should remain committed to their plans, as bitcoin has historically experienced cycles of volatility and price swings should not deter belief in its long-term potential [5]