An analyst who made accurate predictions during the turbulent times of the market in the past talked about the Bitcoin collapse. Accordingly, Michael Burry, co-founder of Scion Asset Management, took to Twitter to express his opinions. Here are the details…
“We are only halfway through the Bitcoin (BTC) crash”
In his Twitter post, Michael Burry said he predicts we are only halfway through the Bitcoin crash. He then talked about traditional financial markets and their relationship with BTC. Accordingly, Burry drew attention to the massive decline in S&P 500, Nasdaq and BTC prices. He said that the cryptocurrency market has gone through contraction multiple times. He then stated that these contractions created “squeezing gains” in the market. Burry’s words are being watched closely by the market, as the analyst has known of several crises before. Accordingly, Michael correctly predicted the subprime mortgage crisis of 2008. It also gained a reputation by making huge profits from this crisis.
Michael Burry’s market predictions
Burry stated that after the increase in inflation, the S&P 500 fell by 25-26% and the NASDAQ by 34-35%. He then said that BTC, known as digital gold, has lost 64-65% of its value this year. According to Burry, the main reason for the declines in the traditional and cryptocurrency markets was compression. Burry also talked about the recent whiplash effect. According to him, this effect will force the Fed to revise interest rates. The bullwhip effect is an erroneous overestimation of demand leading to a stock of assets. Accordingly, Burry predicts that deflationary blows from the effect will appear in the Consumer Price Index. He also predicts that this will cause the Fed to reverse its quantitative tightening.
What awaits Bitcoin and altcoins in the future?
According to Personal Consumption Expenditures data, basic Personal Consumption Expenditures were calculated as 4.7%. This rate does not match the estimates made by many economists in May. It means 0.3% less increase than the 4.7% May forecast. This data does not take energy and food into account. However, it serves as a good indicator for cooling inflation. Everyone knows the high popularity of the CPI around the world. However, the Fed prefers to use PCE data to measure the level of inflation.
Based on all this data, Bitcoin and the overall market will likely face the worst quarter of a decade. Accordingly, the 58% drop of BTC has already taken its place as the biggest drop since the 3rd quarter of 2011. Central banks’ announcements of high inflation data and therefore raising interest rates are seen as the biggest decline factors. As Cryptokoin.com reported, this month, the SC decision in the GBTC and SEC case, the CPI statement, and then the second quarter statement will take place. As such, the month of July will be key for the crypto community.
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