This is what ‘Big Short’ Michael Burry predicted for crypto

Michael Burry, known for the popular film ‘The Big Short‘, has been known for years for its economic forecasts. The most famous example, of course, was the collapse of the housing market in the United States in 2008. Since then, it has had a legendary status in the markets. Recently, Burry has also made some predictions about the crypto market.

Michael Burry predicts more pain

Unfortunately for many crypto investors, Burry’s predictions are not exactly positive. So he expected certainly more pain in the markets in November. First of all, he predicted that the chaos in the crypto market, partly due to the collapse of FTX and other large companies, will spill over into the stock market. This would then turn out positive for gold. The precious metal could benefit greatly from the drama in crypto land, according to Burry.

In addition, Burry predicted that the stock and crypto market will take further hits in the second quarter of next year. Burry suggested that macroeconomic factors such as inflation and interest rate hikes mean that we are far from seeing the bottom.

“Inflation Adjusted, First Half 2022 S&P 500 down 25-26%, and the Nasdaq down 34-35%, Bitcoin down 64-65%. That was multiple compression. Next is profit compression. So, maybe we’re halfway there.”

“The mother of all crashes”

In 2021, Burry already predicted that crypto would be the catalyst for the “mother of all crashes”. According to him it was very likely that the crypto market would sooner or later go down the drain. That would then mean that the stock market would be dragged along.

“All hype/speculation does is bring in retail for the mother of all crashes. When crypto falls in the trillions, or meme stocks fall in the tens of billions, #MainStreet losses will affect the size of countries. History has not changed.”

This prediction turned out to be somewhat correct. The crypto market indeed lost trillions in value and the stock market has also fallen sharply. The correlation between the two markets, as Burry predicted, also turned out to be quite large.

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