American investor and hedge fund manager, Michael Burry, commonly known as “The Big Short,” has shared his view on the prospects of gold in the wake of the crypto market downturn. Burry, credited with predicting the 2008 financial crisis, believes gold might rise to the occasion, especially in the wake of crypto scandals.
In a now-deleted tweet on November 15, Burry stated that the moment for gold to rise would be when crypto-related scandals merge into what he termed a ‘contagion.’
Burry’s comments come as gold continues to rally despite the prevailing macroeconomic factors driven by rising inflation and possible continued interest rate hikes. In particular, gold hit a 60-day high, trading at $1,780.
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Crypto market remains depressed amid piling scandals
It is worth noting that the crypto space has been impacted by myriad scandals that have significantly contributed to the depressed prices. For instance, in May, the market was hit with the Terra (LUNA) ecosystem crash, followed by widespread bankruptcy filings, impacting firms like the Celsius Network and Voyager Digital.
However, the biggest scandal involved the FTX cryptocurrency exchange, which was affected by a liquidity crunch with former CEO Sam Bankman-Fried facing allegations of misappropriation of customers’ funds.
With the suppressed market conditions, Burry previously warned that investors should prepare for a possible stock and crypto crash, per a Finbold report on July 1. According to the Scion Asset Management founder, the recently witnessed massive correction in the S&P 500, Nasdaq, and Bitcoin (BTC) prices represents multiple compressions.
At the same time, as the FTX crisis unraveled, the market was affected significantly, led by assets like Bitcoin, which corrected below the crucial $20,000. The crisis dented the investor hopes of a possible market bottom.
By press time, the asset was trading at $16,700 as bears and bulls continued to battle to take control of the price trajectory.
With gold’s positive performance, proponents of the precious metal have maintained that Bitcoin has a long way to go before being considered a hedge against inflation.
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