Bitcoin Sinks Under $97k, ETH, XRP, SOL Slump As Michael Burry Exits Hedge Fund Amid Valuation Fears

Bitcoin slid below $97K and altcoins including Ethereum, XRP, and Solana fell sharply after legendary investor Michael Burry shut down his hedge fund, heightening fears over inflated tech valuations.

The broad sell-off erased over $200 billion from the crypto market’s capitalization in the past day, with Bitcoin dropping more than 6% to trade at $96,988 as of 3:10 a.m. EST, according to CoinMarketCap.

BTC price (Source: CoinMarketCap)

Ethereum led losses among top altcoins, sliding 9%, while Solana and XRP declined 8% and 7%, respectively.

Boston Fed President Susan Collins added to market anxiety when she said she sees ”several reasons to have a relatively high bar for additional easing in the near term.”

The CME Group’s FedWatch Tool now shows a 49.6% probability of a rate cut next month, down from 2-to-1 just a few days ago.

Burry Shutters Scion Asset Management

Burry’s decision to deregister Scion Asset Management with the US Securities and Exchange Commission heightened investor anxiety that his move signals a broader pullback from overheated tech sectors.

“My estimation of value in securities is not now, and has not been for some time, in sync with the markets,” Burry said in an Oct. 27 letter to shareholders.

Burry is best known for a prescient bet against the US housing market before it unraveled amid the 2008 global financial crises. 

His exit follows increased criticism of technology heavyweights including Nvidia and Palantir Technologies in recent weeks as he accused them of aggressive accounting to inflate profits from investments. 

Burry said in an X post on Wednesday that he was moving “on to much better things.” 

$1 Billion Flows Out Of BTC And ETH ETFs

Outflows from US spot Bitcoin and Ethereum ETFs (exchange-traded funds) totaled more than $1 billion yesterday, underscoring weakening institutional sentiment.

Data from Farside investors shows $866.7 million flowed out of US spot BTC ETFs. Almost all of the Bitcoin investment products saw negative net daily flows on the day. Only Valkyrie’s BRRR and WisdomTree’s BTCW recorded no new flows in the trading session.

Grayscale’s BTC fund posted the largest outflow of $318.2 million. 

US spot ETH ETFs saw record outflows of $259.6 million with BlackRock’s ETHA, Fidelity’s FETH, Invesco’s QETH, and both of Grayscale’s products recording losses.