Michael Burry Of “the Big Short” Is No Longer Pulling Any Punches And His Warning To Wall Street Couldn’t Be Any Clearer The Motley Fool

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.

Betting On A Major Market Downturn

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.

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Burry’s Scion Asset Management discloses massive put options against QQQ and SPY in SEC filing. Timing the market remains a risky strategy. Burry suggests a market downturn could be widespread.

• Over half of U.S. equities are in passive funds, leaving few active investors to stabilize the market.
• 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.
• The short seller has now trained his sights on the broader market, though projecting it in a less flattering light.
• Bram Berkowitz has no position in any of the stocks mentioned.
• Robinhood’s stock had debuted at $38 in July 2020; by February 2021, it was trading around $50, despite volatility.

Scion Capital’s most recent 13F filing with the Securities and Exchange Commission revealed a stunning portfolio allocation that has caught the attention of market observers worldwide. He says AI and tech stock valuations are dangerously inflated.

March 2021: Bitcoin’s Speculative Bubble Confirmed

• The market has shown remarkable resilience this year, pushing through multiple headwinds and remaining firmly afloat.
• 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.
• Calling it an interest chart, the fund manager said this “has happened only twice — in the late 60s and late 90s.
• 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.
• 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.
• Technical indicators show a bearish trend firmly established, with multiple short signals activated across different timeframes.

Investors who heeded his signal might have liquidated positions or shifted to cash, expecting a replay of 2008. 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.” Yet, in the years following that triumph, Burry’s public pronouncements have often veered into a pattern of repeated warnings about impending doom—warnings that have yet to materialize in the way he anticipated. However, there are some who are quite pessimistic about the future value of Bitcoin as Clem Chambers of Forbes predicted that the crypto would crash to around $60,000 and could then slide further into values of around $40,000. 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. The famous investor wrote that Bitcoin had dropped around 40 percent in value since the October peak and had even worse words for the possibility that the price might plunge even further.

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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.

Technical Analysis Suggests Further Downside

According to a Bank of New York Mellon report, margins have come in stronger than expected, driving the market rally. Corporate earnings, a primary driver of the market, hold out more promise. The tech sector has led the market rally this year, as evidenced by the 19% gain by the Invesco QQQ Trust (QQQ) 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.

• Timing the market remains a risky strategy.
• Michael Burry warns the U.S. stock market could face a crash worse than 2000.
• His warning captured real risks—such as margin debt at record levels—but it arrived as vaccines were being rolled out.
• Whether this proves to be another prescient call that cements his legacy or another recent misstep from a legendary investor remains to be seen.
• The chart reveals a descending price channel that has been driving the cryptocurrency lower since its all-time high near $126,000.

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.

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Investor Michael Burry believes current market risks are high. Get curated U.S. market news, insights and key dates delivered to your inbox. Burry’s bet isn’t a market timer’s crystal ball—it’s a risk management tool. The Nasdaq’s 39% surge in 2023 (driven by AI stocks) has raised red flags. 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.

• 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.
• He liquidated nearly all Scion’s positions, holding just one stock, and tweeted warnings of retail-driven losses on a country-sized scale.
• When Burry makes a significant move, especially one as concentrated as his current positioning, institutional investors and retail traders alike take notice.
• Investors who own individual stocks may also want to look carefully at valuations, as Burry actually suggested.

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.

• 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.
• 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.
• “The Big Short” investor Michael Burry has broken his two-year social media silence, reemerging in late October with a flurry of market warnings.
• One of the investors from The Big Short has been warning of the consequences if the value of Bitcoin drops below $70,000, as prices have plummeted massively since they hit a peak late last year.
• Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.

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. The Motley Fool has no position in any of the stocks mentioned. Bram Berkowitz has no position in any of the stocks mentioned.

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 smartytrade reviews 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.