Bitcoin,  Regulation

U.S. will ‘squash’ Bitcoin during crisis: ‘The Big Short’ investor Burry

Forecasting an inflationary crisis, the investor who called the 2008 mortgage crisis predicts governments won’t put up with currency competition in bad times

According to Michael United States investor and hedge fund manager James Burry, Bitcoin will see opposition from the U.S. Government.

In a Feb. 20 tweet, Burry—known for being the first investor to foresee and profit from the 2008 subprime mortgage crisis, as seen in the movie “The Big Short”—explained why he is not bullish on Bitcoin in the long term. He wrote:

“I don’t hate $BTC. However, in my view, the long term future is tenuous for decentralized crypto in a world of legally violent, heartless centralized governments with #lifeblood interests in monopolies on currencies.”

But in “the short run anything is possible,” he said, adding that is why he is “not short #BTC.”

In a Feb. 19 tweet, Burry forecasted an inflationary crisis in the United States, and suggested that in such a crisis “governments will move to squash competitors in the currency arena.” He explicitly mentioned both Bitcoin and gold.

In a separate tweet published earlier today, Burry also suggested that Bitcoin does not provide a solution to Triffin’s dilemma—the conflict of economic interests between short-term domestic and long-term international objectives for countries who control global reserve currencies. He suggested that—because of this—Bitcoin cannot be a reserve currency.

“[Bitcoin] does not solve Triffin’s Dilemma, as a global fiat economy is relative and requires liquidity on the scale of the largest economies in the world,” he said. “This is why Switzerland cannot be a reserve currency. The heart of the fiat system goes to the next GDP champion.”

Also today, U.S. Treasury Secretary Janet Yellen spoke about Bitcoin at the Dealbook/DC Policy Project event. Calling the cryptocurrency an “extremely inefficient” way of conducting transactions, she added that a digital dollar could mean “faster, safer and cheaper payments,” but expressed a host of concerns about it’s impact on banks, financial stability, and money laundering.

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Adrian is a newswriter based out of Pisa, Italy. He's passionate about cryptocurrency, digital rights, IT, tech and futurology and likes to think about the future in a positive way.