'The Big Short' Michael Burry turns bullish on gold, sees contagion after FTX collapse

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Michael Burry, who bet against the US mortgage market and made millions during the 2008 financial crisis, sees gold rallying on a contagion following the collapse of crypto exchange FTX, according to a report by Kitco.com said.

Burry, who runs hedge fund Scion Asset Management, was featured in the book “The Big Short” and the film by the same name for spotting the US mortgage crisis early on. He also made millions in 2019 by purchasing the shares of GameStop before the Reddit chaos took over the stock.

According to Burry, the crypto chaos caused due to FTX collapse works well for gold, a comment quite rare for the investor to make.

"Long thought that the time for gold would be when crypto scandals merge into contagion," said the investor in a tweet which has now been deleted.

Moneycontrol could not independently verify the news.

Gold gains

The comment came as gold notched an impressive nearly 8 percent gains this month, after nearly seven months of continuous losses. Analysts are citing cooling inflation, a decline in the US dollar, crypto risks and a potential slowdown as a few reasons for the price gain.

In another tweet, Burry revealed his position at the moment. “You have no idea how short I am," he stated on Tuesday.

As per a Q3 regulatory filing, Burry had purchased Qurate retail worth $10 million. It owns home shopping channels QVC and HSN. In Q2, he ended up selling most of his primary holdings like Meta and Alphabet. However, these reports do not give away any short positions.

Meanwhile, the cryptocurrency space is facing one of the most chaotic weeks on record, following the last week’s collapse of FTX. The crypto exchange's CEO resigned after failing to raise funds from investors, leading to the firm filing for Chapter 11 bankruptcy protection on Friday.