In a recent CNBC interview, billionaire investor David Rubenstein, the co-founder and co-chairman of private equity firm Carlyle Group, surprised a lot of people when he made the bullish case for investing in crypto right now. The interview started off as primarily a promotion for Rubenstein's new book (How to Invest: Masters on the Craft), with Rubenstein talking about some of the lessons he's learned by interviewing some of the world's most successful investors.
And that's when things got really interesting. After noting that "The greatest fortunes are made when people go against conventional wisdom," Rubenstein suggested that investing in crypto right now might be a good example of that idea. Overall, Rubenstein made two strong arguments for investing in crypto.
Crypto prices are too low
Although Rubenstein was careful to point out that nobody really knows where crypto is going in the future, he did suggest that crypto prices have been "beaten down dramatically." Simply stated, crypto prices are too cheap. During the past few months, investors may have oversold the market, and now there are a lot of bargains to be found. Bitcoin (BTC 0.32%), for example, is down nearly 60% for the year.
Image source: Getty Images.
Rubenstein did not specifically name any cryptos that he's investing in now, but he did hint that he's looking at cryptocurrency exchange Coinbase Global (COIN +0.11%). During the interview, Rubenstein made a cryptic comment about investing in companies that "surround" and "service" the crypto industry. When one of the CNBC co-hosts asked him if Coinbase was one of those companies, Rubenstein seemed to signal that it was. He also said outright, "The industry is not going away." Falling crypto prices have simply made these investments look much more unattractive than they really are.
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Fears about crypto regulation may be overblown
Rubenstein also noted that the crypto lobbyists in Washington, D.C., are very strong right now, and are going to be "fairly aggressive" when it comes to pushing members of Congress to approve crypto-friendly regulation. As Rubenstein noted, the crypto industry is "very willing to spend money on lobbying."
Coming from Rubenstein, this means a lot. His private equity firm is based in the nation's capital, and he has an insider's view of what's happening in and around the Beltway. In April, Rubenstein started changing his mind about crypto, and now it looks like he's becoming more and more convinced that potential crypto regulation will not be as burdensome as once thought.
In part, this could be due to the recent influx of institutional investors into the crypto market. This summer, for example, Coinbase said that it had partnered with BlackRock (BLK +0.00%), the world's largest asset manager with more than $8 trillion under management, to offer crypto trading services for institutional clients. And guess who's one of the investors profiled in Rubenstein's new book? Larry Fink, chief executive officer of BlackRock. So Rubenstein has direct access to the thinking of one of the world's top money managers moving into crypto.
How to invest in crypto like a billionaire
When it comes to crypto, it seems like Rubenstein really gets it. On his own Bloomberg TV show, he recently interviewed Sam Bankman-Fried, the CEO of the cryptocurrency exchange FTX and a very influential figure within the crypto industry known to many as simply "SBF." In the interview, Rubenstein asked repeatedly about the maturation of the crypto industry and where it's headed, so he's clearly interested.
It will be interesting to check out Rubenstein's new book, since it contains investment lessons from some of the greatest names in modern investing. Presumably, some of those lessons can be used to understand the best time to buy cryptocurrency.
As Rubenstein reminded CNBC viewers, one key lesson is that "the conventional wisdom is almost always wrong." So if you've been overly fearful of a crypto winter and a further decline in crypto prices, maybe it's time to become a bit more contrarian. There are plenty of crypto bargains out there; you just have to know where to look.
