Michael Burrys Latest Predictions: $1 6 Bn Short, Long Positions Revealed

Bitcoin peaked in value in early October 2025 at around $124,000, but since then, the price has tumbled significantly and now sits at just over $70,000, with Forbes declaring ‘finally the crash is here’ for the cryptocurrency. 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. The value of the crypto market now stands at nearly $2.5 trillion, down from its over $4 trillion valuation in October. Citing data from Polymarket, a prediction platform, the report adds that there is an 82% chance that Bitcoin will fall to $65,000 in 2026. Several other analysts have echoed Burry’s warnings.

Final Verdict: Proceed With Contrarian Caution

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.

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.

Steps Retail Investors Can Take To Protect Themselves

• During his interview with Lewis, Burry said he shut down Scion because he is worried about the stock market, which he believes could experience a prolonged downturn, a scenario he doesn’t want to have to relive while running a fund with investors.
• 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."
• These strikes were slightly out-of-the-money at the time, suggesting Burry anticipated a 20%+ decline in major indices—a move that would mirror his 2008 housing crisis prediction.
• While the exact strike prices and expiration dates remain undisclosed, analysts speculate these options targeted SPY $450 and QQQ $370 strikes with expirations aligned to late 2023.
• 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.

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."

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

The investing world is once again paying close attention to Michael Burry, the legendary investor who famously predicted and profited from the 2008 housing market collapse. Over half of U.S. equities are in passive funds, leaving few active investors to stabilize the market. Amid 2022’s bear market—where the S&P 500 fell 20%—Burry ramped up doomsaying in 2022, forecasting “more failures coming” in stocks and banks, with bottoms far off. He liquidated nearly all Scion’s positions, holding just one stock, and tweeted warnings of retail-driven losses on a country-sized scale.

• Burry warned that if dropping to around $70,000 was pushing down the prices of more traditionally solid investments such as gold and silver, it could get even worse if Bitcoin slid down to $50,000.
• He described a world teetering on the edge of catastrophe, warning that “every bit of my logic is telling me that a global financial meltdown is coming, and that it will be followed by a worldwide political meltdown as well.”
• One option is to shift funds to a more conservative investment strategy, such as investing in an equal-weighted ETF following the S&P 500 index, which removes the weighting of stocks in the S&P 500 and therefore has less exposure to the high-flying AI companies.

February 7, 2021: Inflation To Annihilate Bitcoin

He also said that the Russia-Ukraine war was dividing Western nations and that together those headwinds could hit growth stocks. Since then, stocks have rebounded and resumed a broadly upward trajectory, punctuated by brief, intermittent pullbacks within the larger uptrend. Sharing a chart on X, Burry noted that American households now have more wealth locked in stocks than in real estate. The short seller has now trained his sights on the broader market, though projecting it in a less flattering light. With approximately 80 percent of his portfolio positioned to profit from declines in these AI leaders, he’s making a statement that can’t be ignored about his view of current market conditions. 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.

Michael Burry Issues Stark Market Warning — Why He Says This Crash Could Top The Dot-com Era

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.

• 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.
• 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."
• Burry’s position, now public knowledge, faced intense scrutiny, with short sellers collectively losing billions.
• 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.
• Today the market has institutional ETFs, greater liquidity depth, and better regulatory infrastructure.
• Since then, stocks have rebounded and resumed a broadly upward trajectory, punctuated by brief, intermittent pullbacks within the larger uptrend.

What his positioning does suggest is that serious investors with proven analytical capabilities see meaningful downside risk in AI valuations at current levels. His track record demands attention, but timing market corrections is notoriously difficult even for the most skilled investors. Many internet companies that failed during that crash were working on legitimate business models, but their stock prices had run too far ahead of reality. Put options give the holder the right to sell shares at a predetermined price, making them profitable when stock prices decline.

• While revenue and earnings have grown, stock prices have often grown faster, expanding valuation multiples to levels that have historically preceded corrections.
• The barrage of bad news has spurred investors to hammer high-flying stocks such as Tesla and Nvidia and virtually erase the main US stock indexes’ progress since November’s election.
• 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."
• Combined, these two positions represent about $1.1 billion in bearish bets, accounting for approximately 80 percent of Scion Capital’s entire portfolio.
• This demonstrates that he’s not simply bearish on the entire market, but instead has specific concerns about AI-related valuations.

Exact losses remain undisclosed, but filings suggest heavy writedowns, capping a streak where Burry’s crash calls repeatedly failed and were caught on the wrong smartytrade review side of a bull market repeatedly. His bet overlooked crypto’s resilience as an inflation hedge in the eyes of investors. Burry’s fund shifted defensively, but the market shrugged off his gloom, climbing another 6% in February and entering a bull phase that would last for years. Burry eventually exited the trade quietly, but the episode underscored his frustration with a market ignoring fundamentals like negative free cash flow and production bottlenecks. In a lengthy email interview with Bloomberg, he likened the trillions flowing into index funds and exchange-traded funds to the collateralized debt obligations that fueled the housing bubble. This was no vague hunch; Burry tied it to overleveraged debt markets and rising protectionism, echoing the subprime warnings that had made him famous.