Big Short Investor Exits Wall Street Again —Is Crypto the Only Trade Left Standing?
Michael Burry, famed for his role in 'The Big Short,' has shut down his California-based hedge fund, Scion Asset Management, and transitioned to a family office model, ending a six-year run. Burry criticized 'AI-bubble' dynamics and accused tech firms of inflating AI-related earnings, drawing parallels to past financial bubbles. His latest filings reveal long-dated bearish positions, signaling expectations of a multi-year market correction. Amid his exit, analysts link his move to a growing interest in crypto as a hedge against liquidity risks. While Burry hasn't disclosed crypto exposure, his philosophy aligns with decentralization and distrust of inflated valuations. His departure may signal a turning point in equity markets, fueling speculation about broader shifts in market sentiment.
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Michael Burry Shuts Down Scion Asset Management
Michael Burry, the investor immortalized in The Big Short, has officially liquidated Scion Asset Management, his American hedge fund headquartered in California. This decision marks the end of a six-year run, drawing comparisons to his 2008 retreat. The fund gained prominence for profiting from the subprime mortgage crisis and for its early role in the GameStop short squeeze.
Burry's Letter to Investors: A Market Out of Sync
In a letter to investors dated October 27, 2025, Burry explained that his “estimation of value in securities is not now, and has not been for some time, in sync with the markets.”
This marks the second time that Burry has voluntarily closed a fund while holding deep contrarian positions. The first instance came after he profited from the subprime collapse. This time, he cites an “AI-bubble dynamic” as a key factor for his exit. Many investors see this as a pivotal moment, indicating stretched equity valuations and rising crypto optimism.
Criticism of AI Boom and Earnings Manipulation
On social media platform X (formerly Twitter), Burry accused major tech firms of “fudging depreciation schedules” to artificially inflate AI-related earnings, comparing it to the dot-com bubble of the late 1990s. In one of his posts, he stated:
“Understating depreciation by extending useful life of assets artificially boosts earnings – one of the more common frauds of the modern era.”
His remarks emphasize the speculative nature of current investments in AI, particularly massive capital expenditures like the purchase of Nvidia chips and servers.
Bearish Bets on AI Stocks and Market Correction
Burry’s latest 13F filing, submitted unusually early, reveals a series of long-dated put options extending to 2026 and 2027, representing bearish wagers against stocks such as Palantir ($PLTR).
This disclosure highlights Burry’s expectation of a multi-year market correction, driven by overextended liquidity and investor euphoria around artificial intelligence. Some users commented that his bearish stance reflects more than a market warning—it demonstrates his fatigue with systemic issues in Wall Street.
A New Philosophy: Self-Custody and Independence
By deregistering Scion and adopting a family office model, Burry removes himself from quarterly disclosures and investor pressures, aligning his strategy with the self-sovereign philosophy often associated with crypto adoption.
As analysts note, this shift indicates a move toward independence from institutional gatekeepers and emphasizes long-term conviction over short-term performance. For many, the move resonates with the ethos of digital assets like Bitcoin.
Implications for Crypto Investors
Burry’s fund liquidation coincides with Bitcoin consolidating around the $103,000 range, accompanied by rising institutional interest in crypto ETFs. Market observers speculate that, if Burry’s prediction of an equity-market downturn proves correct, capital may flow into “hard” digital assets, which are viewed as liquidity hedges.
Historically, periods of monetary tightening followed by stimulus—such as 2008 and 2020—have preceded major Bitcoin rallies. While Burry has not disclosed any crypto exposure, his skepticism of traditional markets aligns with the views of many Bitcoin advocates.