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Government regulation is what bitcoin bulls should fear more than anything, according to legendary investor Michael Burry.
In a Sunday tweet, the Scion Asset Management chief said while he doesn't hate bitcoin and isn't short the digital currency, he sees its "long-term future" as "tenuous."
In his tweet, Burry said "legally violent, heartless centralized governments with #lifeblood interests in monopolies on currencies" won't allow bitcoin to thrive and remain decentralized in the long-term.
Still, the Big Short investor noted "in the short-run anything is possible" for the digital currency. Bitcoin surpassed the $1 trillion market capitalization milestone last week before retracing gains on Monday. The cryptocurrency returned over 300% to investors in 2020 alone.
Burry is best known for his billion-dollar bet on a US housing market crash before the 2007-08 financial crisis which was immortalized in "The Big Short" by Michael Lewis, and a subsequent movie by the same name.
The Sunday tweet from Burry comes as he continues to sound alarms over a potential stock market collapse.
Burry claimed the "market is dancing on a knife's edge" in a recent series of Tweets that argued rampant speculation has caused a huge bubble in the equity market.
Even worse for bitcoin investors, Burry doesn't see gold or the digital asset as a way to prevent losses in the event of an "inflationary crisis" following a market crash.
"In an inflationary crisis, governments will move to squash competitors in the currency arena. $BTC #gold," the investor said.
Burry recently tweeted a string of quotes discussing Germany's path to hyperinflation in the 1920s.
He sees America's current trajectory as replay of the post-World War I mishaps that eventually led to a 320% monthly inflation rate in the country.
If Burry is right again, investors won't be able to argue that they weren't warned.
"People say I didn't warn last time," Burry said in a tweet. "I did, but no one listened. So I warn this time. And still, no one listens. But I will have proof I warned."
See Also:
- A hedge fund chief and crypto bull shares a SPAC investing strategy set to benefit in the inevitable bear market — and breaks down why digital assets will be the next big beneficiary of the SPAC boom
- More than 80% of company finance chiefs say they'll never hold bitcoin – and just 5% say they'll invest in it this year, a survey shows
- UBS says bitcoin is a bubble and too volatile to diversify a portfolio, unlike gold — here's why the bank says it could end up 'worthless'
