Urgent warning: meme stocks and crypto market: is the mega-crash announced by hedge fund legend Michael Burry? | message
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• Michael Burry predicted the collapse of the US mortgage market
• Warning of the “mother of all crashes”
• Particularly in focus: meme stocks and cryptocurrencies
The film “The Big Short” made hedge fund investor Michael Burry known to a broader investor base. The biographical film dealt with how the hedge fund manager foresaw a burst of the US real estate bubble and placed bets against the US real estate market, which brought him a big profit.
Now Burry has again identified two problem areas in which he warns of blistering. Both are currently among the most popular investment segments for investors.
Meme stocks and crypto market before the crash?
In a series of tweets, Burry recently made extremely negative forecasts for certain shares known as meme stocks and the cryptocurrency market. Both attracted numerous hype investors, which led to a significant rise in valuations. “All that the hype and speculation cause is to attract small investors before the mother of all crashes comes,” wrote the stock market expert on Twitter. He went on to explain, “# FOMO parables don’t dissolve sideways; if trillion-trillion cryptocurrencies or 10-billion meme stocks fall behind, retail investor losses will be the size of countries. History hasn’t changed,” said Burry further.
When it came to meme stocks, he specifically scrutinized GameStop. The video game retailer was the first target of a small investor community meeting on Reddit to buy shares in concert earlier this year. “If I drew your attention to GameStop and you did well, I’m really happy for you. But what happens now should have legal and regulatory implications. It’s unnatural, insane and dangerous,” Burry wrote on Twitter.
Burry himself had GameStop shares in his depot, but parted ways with the stake before the stocks hit the stock exchange floor.
In another tweet, Burry justified why he also sees the crypto market as a bubble that is about to burst: The crypto university has problems with leverage positions. “If you don’t know how much leverage there is in cryptocurrencies, you don’t know anything about cryptocurrencies. It doesn’t matter how much else you think you know.”
Burry has since deleted the tweets in question – an act he regularly does. A few months ago, he explained the reason for this to his followers: His Twitter activities had aroused the interest of the US Securities and Exchange Commission.
Burry is not alone
Michael Burry is not alone with his warning about meme stocks and developments in the digital currency market. In fact, there have recently been a growing number of warning voices claiming to have noticed a possible bubble formation in the two asset classes.
One of the critics is Jeremy Grantham, who recently described investing in meme stocks as “a totally nihilistic parody of actual investing” in a recent interview with Bloomberg. In his view, it has “become commonplace” to invest in something “just because it’s funny”. The co-founder and chief investment strategist of the Boston asset manager Grantham, Mayo, Van Otterloo & Co. also took a critical look at the crypto market. – Trade Bitcoin with Plus 500 – that’s how it works. 72% of retail investor accounts lose money when trading CFDs with this provider. You should carefully consider whether you can afford the high risk of losing your money. – DOGECOIN, for example, was created as a joke to make fun of the fact that crypto currencies are worthless. Now the coin has not only prevailed, but has become so successful that even joke cryptocurrencies from the second row, which make fun of DOGECOIN, have valued billions.
Fund managers have also recently rated the crypto market more and more critically. A survey by Bank of America among asset managers revealed a rather bearish assessment of the market and a bubble formation among crypto veteran Bitcoin.
And the crypto bull Mark Cuban recently had warning words ready after he himself was hit by the surprising crash of the Titanium Token.
Is the crash coming?
Even a few days after the urgent warnings from Michael Burry & Co., “the mother of all crashes” is not yet in sight. Although meme titles continue to be highly volatile and the crypto market naturally has to struggle with strong fluctuations, a collapse is currently not in sight. Looking ahead to one year, both cryptocurrencies and meme stocks are still clearly up.
Finanzen.net editorial team
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