Burry advised Elon Musk to issue shares at peak prices to lock in gains, implying an imminent correction of 80% or more. He had tweeted months earlier that Tesla’s reliance on regulatory credits masked underlying weaknesses, calling its market cap—then over $500 billion—”ridiculous” and unsustainable. Burry’s fund reportedly navigated the period with selective bets, but his broad alarm proved premature, setting the tone for a string of overlooked uptrends.

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• His investing philosophy centers on deep fundamental analysis and a willingness to stand alone when his research contradicts popular narratives.
• This was no vague hunch; Burry tied it to overleveraged debt markets and rising protectionism, echoing the subprime warnings that had made him famous.
• 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.

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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.

Passive Investing And Etfs Could Amplify Market Downturn

He points to passive investing and the dominance of big tech firms. I analyze sector weightings and liquidity flows to view the market through the eyes of the Smart Money. These moves align with his 2022 bet on a single prison company stock, a quintessential contrarian move that later liquidated at a loss—a reminder that even legends can misfire. Burry’s exit from SPY/QQQ and pivot to shorting the semiconductor ETF (SOXX)—a key tech enabler—suggests skepticism about overvaluation. Critically, Burry closed these positions by Q3 2023, signaling either profit-taking or a tactical retreat.

• Calling it an interest chart, the fund manager said this “has happened only twice — in the late 60s and late 90s.
• Burry himself has admitted to errors, such as the 2023 “Sell,” and pivoted to new fights, including AI shorts in Palantir and Nvidia in 2025, using put options.
• 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.
• Technical indicators show a bearish trend firmly established, with multiple short signals activated across different timeframes.
• However, if you are concerned, as Burry suggests, that passive investing has become a newer issue that the market may not be ready for, there are certain strategies one can take.

Are Ai And Tech Stocks Creating A Dangerous Bubble?

• Burry’s fund reportedly navigated the period with selective bets, but his broad alarm proved premature, setting the tone for a string of overlooked uptrends.
• 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.
• Historical data show that the market has consistently generated solid long-term returns and that investing in stocks is less risky when held for the long term.
• If a stock you own has been a multi-bagger in a short period of time and now trades at a ridiculous multiple like 100 or 200 times forward earnings, it may be time to start trimming and taking some gains, at the very least.
• In the first month of 2017, Burry emerged from relative silence with a stark email to investors at his hedge fund, Scion Asset Management.
• The tech sector has led the market rally this year, as evidenced by the 19% gain by the Invesco QQQ Trust (QQQ)

In a world of endless rallies, Burry’s cautionary voice persists, waiting for the crash that feels inevitable—whenever it arrives. For retail followers who sold on his signals, the cost was steep—missed gains totaling trillions in market cap. His warnings—rooted in leverage, speculation, and policy risks—often nailed the vulnerabilities, from inflation’s surge to crypto’s winter. Following his infamous January “Sell” tweet—which he later admitted was wrong—this was a direct assault on market highs.

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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.

Final Verdict: Proceed With Contrarian Caution

Burry advocated for small-cap value stocks as a hedge, underweighted in these funds. In the first month of 2017, Burry emerged from relative silence with a stark email to investors at his hedge fund, Scion Asset Management. Michael Burry, the investor immortalized in the film The Big Short for his correct predictive wager against the housing market leading up to the 2008 financial crisis, has built a reputation as a contrarian genius. Writing in his Substack, Burry pointed towards a recent and steep drop in the value of gold and silver, suggesting that investors were selling up in those more reliable areas due to collapsing cryptocurrency prices.

• Timing the market remains a risky strategy.
• Michael Burry warns the U.S. stock market could face a crash worse than 2000.
• Whether this proves to be another prescient call that cements his legacy or another recent misstep from a legendary investor remains to be seen.
• His warning captured real risks—such as margin debt at record levels—but it arrived as vaccines were being rolled out.

As a consequence of this Michael Burry of The Big Short fame has been warning that the crypto crash may have been causing more problems for the economy as investors might be selling off other assets to cover their positions. 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. Nobody can know whether more stock market pain lies ahead or the economy is about to tank — but investors have definitely been warned about stormy times ahead. 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.

Over the past eight years, from early 2017 to late 2023, Burry issued at least a dozen high-profile predictions and trades betting on market collapses, only to watch equities climb higher, assets rally, and his timelines evaporate. US hedge fund manager Michael Burry, known for predicting the 2008 US housing collapse, has now sounded an alarm about Bitcoin. Burry appears to be betting on a major market downturn, while also taking long positions in some companies, as revealed by his latest SEC filing.

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 smartytrade reviews reached all-time highs amid geopolitical tensions and dollar concerns, Bitcoin has completely ignored those traditional catalysts.

• “This will not happen again,” he implied in deleted posts, warning of repercussions for retail traders.
• He had tweeted months earlier that Tesla’s reliance on regulatory credits masked underlying weaknesses, calling its market cap—then over $500 billion—”ridiculous” and unsustainable.
• Michael Burry, Jeremy Grantham, and other market commentators have for years been warning that stocks will crash and the economy will crater.
• In a 2 February Substack post, Burry said that the cryptocurrency’s decline may have compelled the institutional investors and corporate treasurers to unload positions in other assets to cover losses.

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."