Will Bitcoin’s Decline Trigger Ripple Effects? Here’s What The Big Short’s Michael Burry Says Stock Market News

Pointing towards the end-of-January dip in gold and silver prices, he added, "It looks like up to $1 billion in precious metals were liquidated at the month’s very end as a result of falling crypto prices." On Wednesday, the price slumped to $71,739 in New York, and the token is down nearly 17% in 2026, with the broader crypto market losing over $460 billion in value the previous week. Burry believes the recent drop in the largest and most popular cryptocurrency could have ripple effects across markets, particularly in gold and silver. Burry’s Scion also reveals long positions in companies such as Stellantis, Discovery, Expedia, CVS, MGM Resorts, Iheartmedia, and Cigna.

Bill Gross, the billionaire investor dubbed the "Bond King," told Business Insider this week that President Donald Trump’s "destructive" tariffs threatened to choke growth and reignite inflation. The "Wizard of Wharton" and author of "Stocks for the Long Run" said that grim first-quarter growth forecasts partly reflected businesses stockpiling before tariffs take effect, as imports subtract from GDP. Every time Theron publishes a story, you’ll get an alert straight to your inbox! According to Precedence Research, the market size is expected to rise to over $850 billion in 2034 from $146 billion in 2024. The U.S. artificial intelligence (AI) market is expected to explode despite the rising chatter of a bubble. Given expectations that the current Fed Chair, Jerome Powell, will be replaced by a more dovish leader, either Kevin Warsh or Kevin Hassett, rates could become more accommodative than currently foreseen.

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The broader implication is that market participants should carefully evaluate their exposure to AI-related investments and consider whether current valuations adequately reflect potential risks. His institutional fund operates with different constraints, time horizons, and risk tolerances than most individual portfolios. The critical question for investors is whether Burry’s positioning represents prophetic insight or premature pessimism. While revenue and earnings have grown, stock prices have often grown faster, expanding valuation multiples to levels that have historically preceded corrections. Nvidia’s stock price has multiplied several times over as demand for its graphics processing units has exploded among companies building AI systems.

The Contrarian’s Playbook For 2024

• Now, Burry seems mainly concerned not just about market froth and excessive exuberance over artificial intelligence, but also the structure of the stock market, which has shifted from more actively managed a few decades ago to being very passive.
• He doesn’t follow the crowd and often takes positions that seem counterintuitive to prevailing market sentiment.
• Weeks later, GameStop exploded anew, surging another 1,000% in a second wave of short covering, driven by persistent Reddit enthusiasm.
• This isn’t a hedge or a minor contrarian position—this is a concentrated bet that reflects deep conviction about future market direction.

When Burry makes a significant move, especially one as concentrated as his current positioning, institutional investors and retail traders alike take notice. He doesn’t follow the crowd and often takes positions that seem counterintuitive to prevailing market sentiment. With approximately $1.1 billion bet against two of the market’s most prominent artificial intelligence stocks, Burry appears to be sounding the alarm on what he may view as the next major market bubble. Michael Burry warns stock market crash worse than 2000 dot‑com surge — AI valuations fuel risk Michael Burry warns the U.S. stock market could face a crash worse than 2000.

The Big Short’s Michael Burry Has Ominous Warning For Economy If Bitcoin Crash Hits $70,000

Today, according to Burry, over half of the money invested in the stock market is passive. Now, Burry seems mainly concerned not just about market froth and excessive exuberance over artificial intelligence, but also the structure of the stock market, which has shifted from more actively managed a few decades ago to being very passive. Even when Burry turned out to be right and made tremendous profits for his investors, during the recent interview, he said that nobody called to apologize, but also that he didn’t expect anyone to, either. No longer a fund manager, Burry isn’t pulling any punches — and his warning to Wall Street couldn’t be any clearer. Recently, though, Burry has made a big change, shutting down his fund, Scion Asset Management, and launching a Substack newsletter. If stocks plunge and growth tanks, veteran commentators who’ve been blowing the whistle on sky-high valuations and macroeconomic headwinds might feel vindicated.

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• Yet, each time, markets defied his script, powered by innovation, liquidity, and human optimism.
• Can his warning be taken at face value or just shrugged off as an attention-seeking gimmick?
• Corporate earnings, a primary driver of the market, hold out more promise.

While the exact strike prices and expiration dates remain undisclosed, analysts speculate these options targeted SPY $450 and QQQ $370 smartytrade review strikes with expirations aligned to late 2023. The Motley Fool has no position in any of the stocks mentioned. Bram Berkowitz has no position in any of the stocks mentioned.

Burry’s strategy hinges on put options on the SPDR S&P 500 ETF (SPY) and Invesco QQQ Trust (QQQ), with a notional value of $886 million and $739 million, respectively. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Cost basis and return based on previous market day close. Burry, whose lucrative wager against the mid-2000s US housing bubble was immortalized in the film "The Big Short," is known for making dire predictions and betting against popular assets such as Tesla, Nvidia, Apple, and the S&P 500. The Rosenberg Research president, who in 2007 was labeled the "skunk at the picnic" and "class clown" for predicting a recession that arrived soon after, said to any investor adding risk to their portfolio, "You really need to have your head examined."

Put Options Revealed

Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. But Burry seems to be betting that market psychology and technical patterns can repeat regardless of macro context. Today the market has institutional ETFs, greater liquidity depth, and better regulatory infrastructure. Unlike gold and silver, which have reached all-time highs amid geopolitical tensions and dollar concerns, Bitcoin has completely ignored those traditional catalysts.

• Combined, these two positions represent about $1.1 billion in bearish bets, accounting for approximately 80 percent of Scion Capital’s entire portfolio.
• While revenue and earnings have grown, stock prices have often grown faster, expanding valuation multiples to levels that have historically preceded corrections.
• This demonstrates that he’s not simply bearish on the entire market, but instead has specific concerns about AI-related valuations.

The Scion Asset Management chief sounded the alarm in 2021 on the "greatest speculative bubble of all time in all things" and declared that buyers of meme stocks and cryptocurrencies were barreling toward the "mother of all crashes." He said that, while the overall stock market could head higher, a rotation out of riskier, pricier stocks like Nvidia and into defensive stocks was "more likely now than any other time over the past couple of years." This factor could lead to sector rotation out of current market leaders and into laggards such as small-caps and interest-rate-sensitive stocks.

Taking Stock

• Michael Burry’s massive bet against Nvidia and Palantir represents one of the most significant contrarian positions taken by a prominent investor in recent years.
• For retail followers who sold on his signals, the cost was steep—missed gains totaling trillions in market cap.
• Michael Burry warns stock market crash worse than 2000 dot‑com surge — AI valuations fuel risk
• The SPDR S&P 500 ETF (SPY), an exchange-traded fund (ETF) that tracks the broader S&P 500 Index, has gained 16.42%, on top of the 24.5% jump in the previous year, and the nearly 26% gain in 2023.

For Bitcoin to reach Burry’s $50,000 target, it would need to fall an additional 25% from current levels. The chart reveals a descending price channel that has been driving the cryptocurrency lower since its all-time high near $126,000. Bitcoin is currently trading at $67,274, down 8.15% in the last 24 hours. Burry posted on X a comparative chart with the simple message “$BTC Patterns,” where he draws structural similarities between the current drop—from $126,000 to $70,000—and the previous brutal plunge that took Bitcoin from $35,000 to below $20,000.

• Spot platinum was up 2.1% to $2,272.55 per ounce after hitting an all-time high of $2,918.80 on 26 January, while palladium added 0.7% at $1,787.55.
• Burry’s position, now public knowledge, faced intense scrutiny, with short sellers collectively losing billions.
• Since then, stocks have rebounded and resumed a broadly upward trajectory, punctuated by brief, intermittent pullbacks within the larger uptrend.
• Now, I think the whole thing is just going to come down, and it will be very hard to be long stocks in the United States and protect yourself.
• The Scion Asset Management chief sounded the alarm in 2021 on the "greatest speculative bubble of all time in all things" and declared that buyers of meme stocks and cryptocurrencies were barreling toward the "mother of all crashes."

Just as momentum was building, President Donald Trump’s tariffs unsettled markets, triggering a sharp selloff in early April. The market has shown remarkable resilience this year, pushing through multiple headwinds and remaining firmly afloat. Calling it an interest chart, the fund manager said this “has happened only twice — in the late 60s and late 90s.

This isn’t a hedge or a minor contrarian position—this is a concentrated bet that reflects deep conviction about future market direction. Combined, these two positions represent about $1.1 billion in bearish bets, accounting for approximately 80 percent of Scion Capital’s entire portfolio. Burry purchased put options on one million Nvidia shares, valued at approximately $186.6 million, and put options on five million Palantir shares, worth roughly $912.1 million. The filing disclosed that Burry has taken substantial put option positions on Nvidia and Palantir Technologies, two companies at the forefront of the artificial intelligence revolution.