- Michael Burry has bearish options against the S&P 500 and Nasdaq 100, with 93% of his portfolio betting against US stocks.
- Observers speculate on a potential bullish run for Bitcoin, given the historical pattern.
New York’s financial streets are abuzz with a recent report from Reuters revealing that Michael Burry, renowned for his depiction in “The Big Short,” holds significant bearish options against the S&P 500 and Nasdaq 100. At the conclusion of Q2, Burry’s Scion Asset Management procured put options with notional values of $739 million and $886 million against Invesco QQQ Trust ETF and SPDR S&P 500 ETF, respectively.
Decoding Put Options
For those unacquainted, put options grant the right to vend shares at a specified price in the future and are usually procured to manifest a bearish stance. The exact cost Scion Asset Management paid for these puts remains undisclosed, as the regulatory mandate doesn’t require revealing options’ strikes, prices, or expiration dates.
Burry’s Legacy: Predicting the 2008 Crisis
Michael Burry’s prominence emanated from his bets against the U.S. housing market preceding the 2008 financial debacle, immortalized in both the “The Big Short” book and its film adaptation. While the Nasdaq 100 has surged nearly 39% and the S&P 500 about 17% this year, aided by gains from megacap companies, Burry seems to be anticipating a shift.
Shift in Scion Asset Management’s Portfolio
Recent filings also delineate that the fund divested its stakes in Chinese giants like JD.com and Alibaba, in addition to regional banks it previously bet on. On the flip side, it augmented its stake in the online luxury marketplace, RealReal Inc, and initiated new stakes in companies like iHeartMedia and Warner Bros. Discovery.
Burry’s Notable Historical Portfolio Decisions
Last August, Burry caught the public’s eye when he divested all long positions to invest in prison company Geo Group Inc, though he no longer holds those shares.
Potential Bull Run for Bitcoin?
As the crypto market observes Bitcoin’s ongoing stagnation, Burry’s bearish anticipation for the US stock markets has ignited speculations. History suggests Bitcoin could potentially embark on a bullish run, much like its surge during the US regional bank crisis in 2023. With an ever-increasing optimism surrounding a potential approval of a Bitcoin ETF, the coming months might be decisive for the crypto market.
