Cryptocurrency: Check out 'Big Short' investor Michael Burry's prophecy

Michael J Burry, the famous investor who predicted the collapse of the housing market bubble in 2008, has issued a warning about the fate cryptocurrencies. He had tweeted his concerns but he deleted that tweet later.

“All hype/speculation is doing is drawing in retail before the mother of all crashes,” he tweeted. “When crypto falls from trillions, or meme stocks fall from tens of billions, #MainStreet losses will approach the size of countries,” Burry added that people’s fear of missing out has propelled asset prices to unsustainable levels. “#FOMO Parabolas don’t resolve sideways,” he cautioned.

Crypto concerns

The Scion Asset Management founder anticipated the US housing-market crash which led to the 2008 global financial crisis. The movie “Big Short” chronicles his legendary short position anticipating the bubble.

“The problem with #Crypto, as in most things, is the leverage. If you don’t know how much leverage is in crypto, you don’t know anything about crypto” he had tweeted.

Previous warnings

Burry had previously issued warnings about Tesla, GameStop, Bitcoin, Dogecoin, Robinhood, inflation, and the stock market.

Regulatory maze

Incidentally, in India RBI has time and again shared a cautionary note about cryptocurrency trading in India. RBI has said in very clear terms that they have not authorized or issued a regulation for any entity to deal with cryptocurrencies, and individuals dealing with them would bear all risks. RBI, on April 6, 2018, directed that all entities regulated by it shall not deal in virtual currencies or provide services for facilitating in dealing with or settling the cryptocurrencies. Hence, all the banks that were already providing such services were told to exit the relationship within three months with the cryptocurrency trading platforms.

However, on March 4 last year, the Supreme Court set aside the RBI circular, which was issued on April 6, 2018, lifting curbs on cryptocurrency trading in India. Currently Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 is still pending to be presented in the Parliament. Meanwhile, the finance minister has said on various occassions that the decision on the regulation part will be taken in consultation with the RBI.