Finance

‘Big Short’ investor Michael Burry says Tesla’s $1.5 billion bet on Bitcoin was a distraction — and Dogecoin’s record price signals a massive bubble

Michael Burry
“The Big Short” investor Michael Burry.

Bloomberg TV

  • “The Big Short” investor Michael Burry suggested Tesla bought bitcoin to distract from regulatory issues in China.
  • Burry also pointed to Dogecoin’s record price as evidence of a huge market bubble.
  • The Scion Asset Management boss revealed he was short Tesla in December.
  • Visit Business Insider’s homepage for more stories.

Michael Burry questioned Tesla’s bitcoin investment and sounded the alarm on Dogecoin’s record price in a series of now-deleted tweets on Monday.

“Chinese regulators summon Tesla on quality issues as consumers complain about quality … but $TSLA bought $BTC,” the Scion Asset Management boss tweeted, using the tickers for Tesla and Bitcoin. “In my mind’s eye, so much #digitalconfetti.”

In other words, Burry thinks Tesla may have timed its $1.5 billion purchase of bitcoin to distract from its China troubles.

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Burry, whose billion-dollar bet on a US housing-market collapse was chronicled in Michael Lewis’ book “The Big Short,” revealed he was short Tesla in December. He poked fun at Tesla CEO Elon Musk and the fact his company’s stock price has moved in tandem with bitcoin in another tweet on Monday.

“$TSLA and $BTC correlation coefficient is 0.951967 over the last six months,” Burry said. “@elonmusk going for perfect unity? Nah, Elon dreams the impossible. He is determined to break unity. Correlation > 1. And he has history on his side. $TSLA and $BTC investors can make anything happen.”

Tesla was not immediately available for comment when contacted by Insider.

Burry, who unknowingly laid the groundwork for GameStop shares to skyrocket as much as 2,500% last month, took aim at Dogecoin in another tweet. The cryptocurrency, which was created as a joke, soared to a record high this week after Musk tweeted about it. It now commands a $10 billion market capitalization.

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“A doge’s breakfast maybe,” Burry said. He linked to a Wall Street Journal story in which Dogecoin’s creator said its current price of 8 cents was as absurd and nonsensical as GameStop stock being worth $325 at one point last month.

“We are in a blow-off top in all things,” Burry continued, referring to a chart pattern that shows a steep increase in an asset’s price and trading volume, followed by a rapid price decline.

“Markets have now bubbled over in a dangerous way,” he said in an earlier tweet.

Burry hinted in yet another tweet that he expects a market crash in the coming months. He linked to “When The Levee Breaks,” a Led Zeppelin song, and said, “This time we’ll play it at the beginning, not at the end.”

Read the original article on Business Insider
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