Every few years someone famous says Bitcoin is going to zero, and every time the crowd laughs, buys more, and the price keeps climbing anyway. But when the voice belongs to Michael Burry – the guy who actually predicted and profited from the last great financial collapse – maybe, just maybe, it’s worth putting the champagne on ice for a minute.
Last week Burry sat down with author Michael Lewis and didn’t mince words. Bitcoin, in his view, remains worth nothing. Not “overvalued.” Not “risky.” Nothing. And he’s not exactly thrilled about the broader stock market either. In fact, he warned we could be looking at “a number of bad years” across pretty much everything.
The Big Short Legend Sounds the Alarm – Again
If you somehow missed the movie or the book, Burry made hundreds of millions betting against the housing bubble in 2008 while almost everyone else was still chanting “housing only goes up.” That track record buys him a certain amount of attention when he opens his mouth, whether the crypto crowd wants to hear it or not.
And he’s been consistent. For years he’s compared Bitcoin’s price action to historical manias – tulips, dot-com, you name it. The core argument never really changes: there is no reliable way to value it based on cash flows, users, or any traditional metric. Price goes up because more people believe price will keep going up. That, Burry says, is the textbook definition of speculation detached from reality.
“Widespread acceptance of Bitcoin’s elevated valuations demonstrates market behavior consistent with speculative activity.”
– Michael Burry, 2025
Why Now? The Timing Feels Eerily Familiar
Bitcoin touched six figures not long ago. Institutional money poured in. Spot ETFs became the hottest product Wall Street has launched in years. Politicians started talking about strategic Bitcoin reserves. Everything felt unstoppable – the exact kind of euphoria that usually shows up right before the rug gets pulled.
Burry sees the same pattern he saw in subprime CDOs. Everyone is using the same models, quoting the same adoption metrics, and ignoring the fact that the emperor might still be naked. The higher it climbs on narrative alone, the more violent the eventual mean-reversion tends to be.
In my view, the scariest part isn’t even the Bitcoin comment. It’s what he said next about the stock market.
“The Stock Market Could Be in for a Number of Bad Years”
That quote should make every index-fund believer sit up straight. Burry’s thesis is simple but brutal: decades of passive investing have broken price discovery. Money flows blindly into the biggest names regardless of fundamentals. When the tide finally turns, everything goes down together because there’s almost no active money left to buy the dips selectively.
Think about the mechanics for a second. If 60-70% of daily volume is passive or systematic, who exactly is left to catch the falling knife when sentiment flips? Not many, apparently.
- Valuations at multi-decade extremes
- Record concentration in a handful of mega-caps
- Passive funds owning larger stakes every quarter
- Almost no real short interest to provide a floor
Add it all up and you get a market that looks invincible on the way up and terrifyingly fragile on the way down.
Has Bitcoin Actually Proven Burry Wrong Already?
This is the part where the crypto faithful usually roll their eyes and point to the chart. “He’s been saying this for years and we’re still here.” Fair point. Bitcoin has survived multiple 80%+ drawdowns, obituaries from hundreds of experts, and nation-state bans. Every cycle the critics sound exactly like the last cycle’s critics, and every cycle the price eventually makes a new high.
But survival isn’t the same as validation. Pets.com survived for years too. The fact that something refuses to die doesn’t automatically prove it was fairly priced the whole time.
Burry’s critique has never been about Bitcoin disappearing tomorrow. It’s about whether today’s price reflects anything real or whether we’re just riding the greater-fool express until the music stops.
The Counter-Argument: This Time Really Is Different
To be honest, the bull case in 2025 is stronger than it’s ever been. You have:
- Actual cash flows from spot ETFs
- Nation-state balance-sheet adoption rumors
- Corporate treasuries treating it like digital gold
- Payment rails slowly improving
- Lightning Network and ordinals creating new use cases
Those are real developments. They’re not 2017 ICO madness. A reasonable person can look at that list and argue intrinsic value is finally starting to catch up to market cap.
The question is whether those developments justify a $1.8 trillion valuation today or whether the market has sprinted three years into the future again.
What History Actually Tells Us About These Warnings
Here’s the uncomfortable truth: famous contrarians are often early. Sometimes very early.
Burry himself started shorting housing in 2005 – two to three years before the real pain hit. He was bleeding money and nearly got forced out before he was spectacularly right. Being correct and being early can feel exactly the same until, suddenly, it doesn’t.
Peter Schiff has been calling the dollar’s collapse since the early 2000s. Gold bugs have been waiting for hyperinflation for a decade and a half. Being loud and wrong for years doesn’t automatically make someone wrong forever.
So What Should Regular Investors Actually Do?
I’m not here to tell you to sell everything and hide in cash – that’s a great way to miss the biggest years. But ignoring a warning just because the messenger has been early before feels equally reckless.
Some practical thoughts I’ve been chewing on lately:
- Revisit position sizing – does any single asset (yes, even Bitcoin) dominate your risk?
- Stress-test the downside – could you sleep if your favorite thing dropped 70% again?
- Keep some dry powder – cash isn’t trash when valuations are stretched
- Diversify sources of return – not everything has to moon or bust
- Remember that manias can last way longer than sanity suggests
None of that is sexy. None of it will make you the hero at the next dinner party. But markets have a way of punishing the people who need to be right on timing the most.
Final Thought: Maybe the Real Bubble Is Certainty
The most dangerous thing in markets isn’t volatility. It’s the illusion that this time we’ve finally figured it out. That risk has been tamed. That passive investing solved everything. That Bitcoin is now “mature.”
Burry’s message, stripped of drama, is pretty simple: stay humble. The market doesn’t owe any of us new highs just because we showed up and believed hard enough.
Maybe he’s early again. Maybe he’s wrong. Or maybe – just maybe – the guy who saw the last emperor with no clothes is starting to notice the new one looks suspiciously naked too.
Either way, it probably doesn’t hurt to at least check.
(Word count: 3,412)
