When Burry makes a significant move, especially one as concentrated as his current positioning, institutional investors and retail traders alike take notice. He doesn’t follow the crowd and often takes positions that seem counterintuitive to prevailing market sentiment. With approximately $1.1 billion bet against two of the market’s most prominent artificial intelligence stocks, Burry appears to be sounding the alarm on what he may view as the next major market bubble. Michael Burry warns stock market crash worse than 2000 dot‑com surge — AI valuations fuel risk Michael Burry warns the U.S. stock market could face a crash worse than 2000.

Burry’s strategy hinges on put options on the SPDR S&P 500 ETF (SPY) and Invesco QQQ Trust (QQQ), with a notional value of $886 million and $739 million, respectively. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Cost basis and return based on previous market day close. Burry, whose lucrative wager against the mid-2000s US housing bubble was immortalized in the film "The Big Short," is known for making dire predictions and betting against popular assets such as Tesla, Nvidia, Apple, and the S&P 500. The Rosenberg Research president, who in 2007 was labeled the "skunk at the picnic" and "class clown" for predicting a recession that arrived soon after, said to any investor adding risk to their portfolio, "You really need to have your head examined."

Why Big Tech Dominance Matters In A Sell-off

As a consequence of this Michael Burry of The Big Short fame has been warning that the crypto crash may have been causing more problems for the economy as investors might be selling off other assets to cover their positions. During his interview with Lewis, Burry said he shut down Scion because he is worried about the stock market, which he believes could experience a prolonged downturn, a scenario he doesn’t want to have to relive while running a fund with investors. Nobody can know whether more stock market pain lies ahead or the economy is about to tank — but investors have definitely been warned about stormy times ahead. The barrage of bad news has spurred investors to hammer high-flying stocks such as Tesla and Nvidia and virtually erase the main US stock indexes’ progress since November’s election.

He also said that the Russia-Ukraine war was dividing Western nations and that together those headwinds could hit growth stocks. Since then, stocks have rebounded and resumed a broadly upward trajectory, punctuated by brief, intermittent pullbacks within the larger uptrend. Sharing a chart on X, Burry noted that American households now have more wealth locked in stocks than in real estate. The short seller has now trained his sights on the broader market, though projecting it in a less flattering light. With approximately 80 percent of his portfolio positioned to profit from declines in these AI leaders, he’s making a statement that can’t be ignored about his view of current market conditions. Michael Burry’s massive bet against Nvidia and Palantir represents one of the most significant contrarian positions taken by a prominent investor in recent years.

Nifty 50 Companies

• His institutional fund operates with different constraints, time horizons, and risk tolerances than most individual portfolios.
• Bram Berkowitz has no position in any of the stocks mentioned.
• Many internet companies that failed during that crash were working on legitimate business models, but their stock prices had run too far ahead of reality.
• Robinhood’s stock had debuted at $38 in July 2020; by February 2021, it was trading around $50, despite volatility.
• The short seller has now trained his sights on the broader market, though projecting it in a less flattering light.
• Over half of U.S. equities are in passive funds, leaving few active investors to stabilize the market.

Over the past eight years, from early 2017 to late 2023, Burry issued at least a dozen high-profile predictions and trades betting on market collapses, only to watch equities climb higher, assets rally, and his timelines evaporate. US hedge fund manager Michael Burry, known for predicting the 2008 US housing collapse, has now sounded an alarm about Bitcoin. Burry appears to be betting on a major market downturn, while also taking long positions in some companies, as revealed by his latest SEC filing.

Crypto Market Sentiment Under Pressure

Burry advised Elon Musk to issue shares at peak prices to lock in gains, implying an imminent correction of 80% or more. He had tweeted months earlier that Tesla’s reliance on regulatory credits masked underlying weaknesses, calling its market cap—then over $500 billion—”ridiculous” and unsustainable. Burry’s fund reportedly navigated the period with selective bets, but his broad alarm proved premature, setting the tone for a string of overlooked uptrends.

Could Passive Investing Make The Next Crash Worse?

• Burry’s fund shifted defensively, but the market shrugged off his gloom, climbing another 6% in February and entering a bull phase that would last for years.
• Michael Burry, the investor immortalized in the film The Big Short for his correct predictive wager against the housing market leading up to the 2008 financial crisis, has built a reputation as a contrarian genius.
• Yet, in the years following that triumph, Burry’s public pronouncements have often veered into a pattern of repeated warnings about impending doom—warnings that have yet to materialize in the way he anticipated.
• Burry’s Scion Asset Management discloses massive put options against QQQ and SPY in SEC filing.
• Citing data from Polymarket, a prediction platform, the report adds that there is an 82% chance that Bitcoin will fall to $65,000 in 2026.

Just as momentum was building, President Donald Trump’s tariffs unsettled markets, triggering a sharp selloff in early April. The smartytrade reviews market has shown remarkable resilience this year, pushing through multiple headwinds and remaining firmly afloat. Calling it an interest chart, the fund manager said this “has happened only twice — in the late 60s and late 90s.

• Other market whizzes, including the hedge fund manager David Einhorn and the "Black Swan" investor Mark Spitznagel, have called out epic levels of speculation among investors and cautioned that they’re marching toward disaster.
• Burry advocated for small-cap value stocks as a hedge, underweighted in these funds.
• Nvidia’s stock price has multiplied several times over as demand for its graphics processing units has exploded among companies building AI systems.

Betting On A Major Market Downturn

The Scion Asset Management chief sounded the alarm in 2021 on the "greatest speculative bubble of all time in all things" and declared that buyers of meme stocks and cryptocurrencies were barreling toward the "mother of all crashes." He said that, while the overall stock market could head higher, a rotation out of riskier, pricier stocks like Nvidia and into defensive stocks was "more likely now than any other time over the past couple of years." This factor could lead to sector rotation out of current market leaders and into laggards such as small-caps and interest-rate-sensitive stocks.

Investors who own individual stocks may also want to look carefully at valuations, as Burry actually suggested. However, if you are concerned, as Burry suggests, that passive investing has become a newer issue that the market may not be ready for, there are certain strategies one can take. Burry is clearly one of the best investors in the game. Just like the market has gone up and reached extremely high valuations, sometimes without any explanation, that effect could be just as penalizing when the market is going down. Burry is not the only fund manager to raise this concern, and many of even the best managers say that value investing might be dead, due to this very reason. Now, I think the whole thing is just going to come down, and it will be very hard to be long stocks in the United States and protect yourself.

• Burry himself has admitted to errors, such as the 2023 “Sell,” and pivoted to new fights, including AI shorts in Palantir and Nvidia in 2025, using put options.
• Technical indicators show a bearish trend firmly established, with multiple short signals activated across different timeframes.
• Calling it an interest chart, the fund manager said this “has happened only twice — in the late 60s and late 90s.

In a world of endless rallies, Burry’s cautionary voice persists, waiting for the crash that feels inevitable—whenever it arrives. For retail followers who sold on his signals, the cost was steep—missed gains totaling trillions in market cap. His warnings—rooted in leverage, speculation, and policy risks—often nailed the vulnerabilities, from inflation’s surge to crypto’s winter. Following his infamous January “Sell” tweet—which he later admitted was wrong—this was a direct assault on market highs.

Michael Burry And Jeremy Grantham Have Long Sounded The Economic Alarm A ‘trumpcession’ May Finally Prove Them Right

This isn’t a hedge or a minor contrarian position—this is a concentrated bet that reflects deep conviction about future market direction. Combined, these two positions represent about $1.1 billion in bearish bets, accounting for approximately 80 percent of Scion Capital’s entire portfolio. Burry purchased put options on one million Nvidia shares, valued at approximately $186.6 million, and put options on five million Palantir shares, worth roughly $912.1 million. The filing disclosed that Burry has taken substantial put option positions on Nvidia and Palantir Technologies, two companies at the forefront of the artificial intelligence revolution.

• The Nasdaq’s 39% surge in 2023 (driven by AI stocks) has raised red flags.
• In a lengthy email interview with Bloomberg, he likened the trillions flowing into index funds and exchange-traded funds to the collateralized debt obligations that fueled the housing bubble.
• Then he took potshots at Nvidia for its stock-based compensation accounting.
• Nobody can know whether more stock market pain lies ahead or the economy is about to tank — but investors have definitely been warned about stormy times ahead.
• Cryptocurrency and investing involve significant risk, never invest more than you can afford to lose, and always do your own research or seek professional advice.Content is intended for adults only.

For Bitcoin to reach Burry’s $50,000 target, it would need to fall an additional 25% from current levels. The chart reveals a descending price channel that has been driving the cryptocurrency lower since its all-time high near $126,000. Bitcoin is currently trading at $67,274, down 8.15% in the last 24 hours. Burry posted on X a comparative chart with the simple message “$BTC Patterns,” where he draws structural similarities between the current drop—from $126,000 to $70,000—and the previous brutal plunge that took Bitcoin from $35,000 to below $20,000.