Michael Burry Warns of Trouble as FED Starts $40B T-Bill Buying

The post Michael Burry Warns of Trouble as FED Starts $40B T-Bill Buying appeared first on Coinpedia Fintech News

“The Big Short” legend Michael Burry has issued a dire warning as the U.S. Federal Reserve prepares to buy $40 billion in Treasury bills within 30 days. While the Fed insists this isn’t quantitative easing (QE), Burry argues the move signals a deep liquidity strain in the banking system, one that could spill over into the broader economy and the crypto markets.

A Fragile Banking System Behind the Fed’s $40B T-Bill Push

Fed Chair Jerome Powell disclosed that these purchases are part of “Reserve Management,” but Burry isn’t convinced. He calls it a masked rescue mission for a banking sector still rattled by the 2023 mini-banking crisis. Burry highlights that bank reserves, once at $2.2 trillion pre-crisis, now hover above $3 trillion, yet banks are still showing cracks.

Liquidity Is Quietly Returning

Crypto analyst Lark Davis echoed concerns but focused on what it means for the crypto market. He says the Fed’s T-bill purchases inject liquidity directly into the system: “The money printer is warming up.” He calls this the start of a “stealth QE”, hinting that markets could soon feel the boost.

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Meanwhile, Ash Crypto pointed out a major disconnect:

He highlighted a sharp contrast between traditional markets and Bitcoin. Despite the FOMC announcing three rate cuts for 2025, gold and silver hitting new all-time highs, a $40B Treasury-bill buying spree, gradual QE, and U.S. stocks sitting less than 1% below their ATH, Bitcoin remains 28% below its all-time high. With everything else rallying, he questions whether this gap hints at market manipulation.

Bitcoin Drops Below $90K as Miners Sell

Bitcoin slid over 2%, dropping to $90,252 ahead of options expiry. Analysts like Ted Pillows warn BTC could revisit $85,000, noting its failure to reclaim the $93K–$94K resistance. Support sits in the $88K–$89K zone. Adding pressure, miners are offloading holdings, Marathon Digital dumped 275 BTC worth $25.3 million, according to Lookonchain.

The selling comes as repo market volatility rises, with expectations that the Fed may need even more aggressive liquidity measures to prevent a year-end funding crunch, a scenario Burry sees as further proof of systemic weakness.

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