Michael Burry raises concerns about Nasdaq Dot-Com Bubble, questions Bitcoin’s role as hedge or casualty

May 18, 2026

Michael Burry, famously known for predicting the housing crash in 2008, expressed concerns in May 2026 about the similarities between the current AI-driven Nasdaq rally and the final months of the dot-com bubble.
Bitcoin (BTC) has been exhibiting characteristics of a high-risk tech asset throughout 2026, with its correlation to the Nasdaq hitting a record high of 0.96 in April. This close correlation indicates that a Nasdaq selloff could potentially pull down the price of Bitcoin, regardless of its digital gold narrative.
The recent passing of the CLARITY Act through the U.S. Senate Banking Committee on May 14, 2026, represents a significant turning point for Bitcoin. The act classifies BTC as a digital commodity, potentially opening avenues for institutional investment that could reshape Bitcoin’s relationship with traditional financial markets.
Michael Burry, known for his early prediction of the 2008 crash, has raised concerns once again, this time focusing on the AI-driven tech rally that is propelling the Nasdaq to new heights reminiscent of the dot-com bubble’s peak. In a recent warning on Substack, Burry highlighted the overwhelming focus on AI across financial media, signaling a market in an irrational and final stage similar to the frenzy before the dot-com bubble burst.
Burry’s warning comes against the backdrop of significant market movements, such as the Philadelphia Semiconductor Index’s sharp spike and the Shiller CAPE ratio reaching historical levels associated with poor long-term performance. Additionally, the dichotomy between record-high stock market indices and declining consumer sentiment paints a worrisome picture for the economy.
Bitcoin has been closely mirroring tech stocks in 2026, with its correlation to the Nasdaq reaching unprecedented levels. This close correlation has been fueled by institutional investments in Bitcoin spot ETFs, aligning Bitcoin’s price movements with those of tech stocks. However, the correlation is asymmetric, with Bitcoin responding more closely to Nasdaq sell-offs than rallies.
The recent passage of the Digital Asset Market CLARITY Act by the U.S. Senate Banking Committee has had a positive impact on the crypto markets. Bitcoin saw a significant price increase following the news, indicating optimism among investors about regulatory clarity. The act classifies Bitcoin as a digital commodity under the CFTC’s jurisdiction, providing a regulatory framework that could attract institutional investment.
While Burry’s warnings about the market are heeded by many, his insights suggest a potential 40-50% drop in major tech stocks. Retail investors should be mindful of market conditions and consider diversifying their portfolios to mitigate risks associated with a potential correction. Burry’s past predictions have been proven right, underscoring the importance of paying attention to his insights and adjusting investment strategies accordingly.