Bitcoin has tumbled again coinciding with the famous investor who predicted the sub-prime mortgage crisis warning retail traders that the ‘mother of all crashes’ is on the horizon.
After a slide yesterday, the bitcoin price fell below $30,000 today for the first time since the start of the year – trading at $29,485 at 1.45pm in London and 8.45am in New York.
It came as Michael Burry warned that when the value of cryptocurrencies and ‘meme stocks’ fall it will trigger market losses ‘the size of countries’.
Warning: Top investor Michael Burry said that when the value of cryptocurrencies and so-called ‘meme stocks’ fall it will trigger market losses ‘the size of countries’
He was famously one of the few people to foresee the sub-prime mortgage bubble that triggered the 2008 financial crisis. The Big Short blockbuster film was about him and his hedge fund.
Bitcoin, the leading cryptocurrency, dropped 7 per cent to around $34,000 yesterday – its lowest level in two weeks – while others such as ethereum and dogecoin followed suit.
Digital currencies and popular stocks have exploded in value this last year – drawing in amateur retail investors who have never traded before.
But Burry, founder of private investment firm Scion Asset Management, and others, have warned this has created a bubble that will inevitably burst and harm traders who bought at the top of the market.
On Twitter, in posts that were later deleted, he said: ‘All hype/speculation is doing is drawing in retail before the mother of all crashes.
‘When crypto falls from trillions, or meme stocks fall from tens of billions, Main Street losses will approach the size of countries. History ain’t changed.’
Bitcoin has slid below $30,000 for the first time since the start of the year
Last week he called crypto the ‘Greatest speculative bubble of all time in all things. By two orders of magnitude.’
Since last October bitcoin has rallied from around $10,000 to more than $63,000 in April.
It has since been in freefall after Elon Musk, the electric car tycoon, U-turned on his promise to accept bitcoin as payment for his vehicles, and China began a crackdown.
Beijing ordered banks and payment platform Alipay to stop services linked to crypto.
The beginning and end of a rally: Bitcoin started rising sharply towards the end of 2020 but has slumped since hitting a peak in April
Over the long term, bitcoin’s price is hugely up in a relatively short period of time
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