Hedge fund manager Michael Burry, who correctly identified the housing market bubble in 2008, has issued a warning that the current stock and cryptocurrency market fall may worsen just as investors are seeking for a bottom.
He noted that if the estimate comes true, earnings compressions may be the next to come, and the market should prepare for further suffering.
Burry has raised the possibility of a market crash in recent months while also pointing out that stock values have gotten out of hand.
Projections of the market crash
The founder of Scion Asset Management stated through his Twitter account on June 30 that the significant decline in the values of the S&P 500, Nasdaq, and Bitcoin signals numerous compressions.
The hedge fund manager has already expressed concern about how Americans’ reactions to the increasing inflation may have an adverse effect on profit compressions.
Burry observed that due to the present economic climate, more Americans are spending more than they are saving, and any savings would certainly be gone by Christmas.
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Additionally, he made his cryptocurrency prediction after Bitcoin saw its worst quarterly returns in more than a decade.
According to Finbold, Bitcoin’s returns for the second quarter of 2022 fell by 56 percent.
Burry emphasized that there can still be a few equities that would be useful to investors despite anticipating additional market turbulence. He singled out Booking Holdings, Alphabet Inc., Discovery Inc., and Cigna Corporation.
Although the asset is trading below the $20,000 mark, there are no signals that a rally is about to start.
Inflation and the Federal Reserve’s strict monetary policies will probably cause a drop in Bitcoin and stocks. Given that the CPI numbers will be released soon, July will be critical for both markets that have demonstrated high connection.
