Big Short’ Michael Burry Issues Dire Warning on US FED’s $40B T-Bills Buy PlanMichael Burry claims the plan of the US Fed to purchase $40 billion in Treasury bills shows...
Varinder Singh
Thu, December 11, 2025
- “The Big Short” Michael Burry red flags the Fed’s plan to buy $40 billion of Treasury bills.
- Burry warns about liquidity crunch in US banking system and QE will start soon.
- Bitcoin price fell more than 2% under $90K, with BTC miners selling their holdings.
“The Big Short” Michael Burry, famous for predicting the 2008 financial crisis, has issued a stark warning regarding the plans of the US Fed to purchase $40 billion in Treasury bills (T-bills). Will the liquidity crunch in the banking sector trigger Bitcoin and crypto market crash?
Michael Burry Warns About Weakness in Banking System
Fed Chair Jerome Powell announced that the US Federal Reserve will buy T-bills worth $40 billion in a month. The Fed also claimed this isn’t QE. However, it shows a sign of a liquidity crunch in the banking system.
Also, Michael Burry red flags the Fed’s latest move to buy $40 billion of Treasury bills within 30 days. He claims it is a sign of fragility in the U.S. banking system rather than strength, with significant negative consequences for the U.S. economy and financial markets.
He scoffs at the Fed for making the treasuries purchase announcement under the term “Reserve Management Purchases.” Burry claimed this plan is essentially a hidden attempt to stabilize a banking sector still struggling with the aftershocks of the 2023 mini-banking crisis.
He points out that bank reserves stood at just $2.2 trillion before the crisis, compared to over $3 trillion today. “If the US Banking system can’t function without $3+ trillion in reserves/life support from the Fed, that is not a sign of strength but a sign of fragility,” Burry warns.
Burry added that each new crisis would permanently inflate the Fed’s balance sheet. “Seems that after every crisis now the Fed needs to expand its balance sheet permanently or guarantee a bank funding crisis. No wonder stocks are doing well,” he wrote.
Michael Burry Says Fed Will Start QE Soon
As CoinGape earlier reported, the US Fed started injecting funds into the banking system through repurchase agreements (repo) immediately after quantitative tightening (QT) ended. This helped bring a slight rebound in crypto stocks, Bitcoin, and altcoins.
Michael Burry also cautioned about the misleading Wall Street recommendations to buy bank stocks. Burry revealed that he prefers to keep cash in Treasury Money Market Funds for amounts over the $250,000 FDIC limit.
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Big Short’ Michael Burry Issues Dire Warning on US FED’s $40B T-Bills Buy Plan |
