Why Bitcoin Could Collapse Another 50%, Says Michael “Big Short” Burry
July 01 2022 - 12:52PM
NEWSBTC
Former hedge fund manager Michael Burry made another bearish
prediction for Bitcoin and traditional equities. Renowned for his
short position which preceded the U.S. housing market crash, and
one of the periods in recent economic history for the world, Burry
believes more pain for BTC’s price is ahead. Related Reading
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Buying? Currently, Bitcoin is trading at $19,400 with an 8% loss in
the past 7 days. The cryptocurrency was moving sideways around its
2017 all-time high levels, $20,000, but the market took yet another
turn to the downside and might re-test its yearly lows near
$17,000. This could be a fraction of future losses, according to
Burry. The former hedge fund manager has been bearish on BTC seems
the cryptocurrency was trading north of $60,000, in October 2021.
Via his Twitter account, Burry asked his followers tips on how to
short a cryptocurrency: Ok, I haven’t done this before, how do you
short a cryptocurrency. Do you have to secure a borrow? Is there a
short rebate? Can the position be squeezed and called in? In such
volatile situations, I tend to think it’s best not to short (…). A
short time after, BTC’s price reached its current all-time high
which could have resulted in major profits for Burry, if he was
able to open a short position. In that case, he might still wait on
taking profits, according to its latest prediction, traditional
equities and BTC could experience more downside on the back of a
bad earnings season: Adjusted for inflation, 2022 first half
S&P 500 down 25-26%, and Nasdaq down 34-35%, Bitcoin down
64-65%. That was multiple compression. Next up, earnings
compression. So, maybe halfway there. Some Good News For Bitcoin In
The Short Term Two experts recently shared potential bullish
catalyzers for Bitcoin, at least for a short period of time.
Jurrien Timmer, Director of Macro for investment firm Fidelity,
believes equities have a chance to rebound from their recent crash.
However, Timmer believes the risk-off season could extend further
while bond yields trend upwards. In the upcoming earnings season
for U.S. publicly traded companies, one could provide more clues on
what’s next for the market, including Bitcoin which has been
displaying a correlation with traditional equities. With bond
yields down and equities up, the correlation between the two asset
classes remains slightly positive on a 12-month basis. It’s rare to
see the Z-score for both stocks and bonds so negative at the same
time. pic.twitter.com/BhJ8BklPmo — Jurrien Timmer (@TimmerFidelity)
July 1, 2022 On the other hand, Bloomberg Intelligence Mike McGlone
has been expecting a drop in the price of commodities. If these
assets trend to the downside, the Fed might slow down on its
economic tightening and provide risk-on assets like Bitcoin with
some room for relief. Commodities rallying often indicate high
inflation, they suggest the opposite when they trend to the
downside which could suggest the U.S. financial institution might
be succeeding at cutting down inflation, currently their apparent
number one priority. McGlone said: Commodities Aren’t Complicated,
1H Was High: When the history of 2022 is written, there’s a good
chance that the 1H pump in commodity prices will play out like
similar surges in the past, with a reciprocal dump. Timmer and
other experts believe that negative news on the economy, talks of
economic recession, and a sustained market crash might allow the
Fed to become more dovish on its monetary policy. The market has
reacted to the downside as a result of the Fed, but some believe
this will be insufficient to stop inflation. Related Reading
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Markets Fed Chairman Jerome Powell has expressed doubts about a
less aggressive monetary policy. In an interview with The Wall
Street Journal, Powell said bringing down inflation will result in
“some pain” for global markets. Does this mean Burry will be right
as in 2008?
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