In a recent CNBC interview, billionaire investor David Rubenstein, co-founder and co-chairman of private equity firm Carlyle Group, surprised many when he offered the bullish case for investing in crypto right now. The interview began primarily as a promotion for Rubenstein’s new book (How to Invest: Master Craftsman), with Rubenstein discussing some of the lessons he learned from interviewing some of the world’s most successful investors.
And that’s where it got really interesting. After noting that “the greatest fortunes are made when people go against conventional wisdom,” Rubenstein suggested that investing in crypto now could be a good example of this idea. Overall, Rubenstein made two strong arguments for investing in crypto.
Crypto prices are too low
Despite Rubenstein carefully pointing out that no one really knows where crypto is headed in the future, he did hint that crypto prices have been “smashed down dramatically.” Simply put, crypto prices are too cheap. Investors may have oversold the market in recent months and there are now plenty of bargains to be found. Bitcoin (BTC 1.65%)for example, is down nearly 60% for the year.
Rubenstein didn’t name any cryptos he’s investing in now, but he did hint that he’s into cryptocurrency exchanges Coinbase Global (COIN -6.95%). During the interview, Rubenstein made a cryptic comment about investing in companies that “surround” and “serve” 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 bluntly, “The industry is not going away.” Falling crypto prices have simply made these investments seem a lot less attractive than they really are.
Fears about crypto regulation might be overdone
Rubenstein also noted that crypto lobbyists in Washington, DC are currently very strong and will be “pretty aggressive” in pushing members of Congress to agree to crypto-friendly regulation. As Rubenstein noted, the crypto industry is “very willing to spend money on lobbying.”
Coming from Rubenstein, that means a lot. His private equity firm is based in the country’s capital, and he has an insider’s view of what’s happening in and around the Beltway. In April, Rubenstein began to change his mind about crypto, and now it looks like he’s becoming more convinced that potential crypto regulation won’t be as onerous as once thought.
This could be due in part to the recent influx of institutional investors into the crypto market. For example, this summer Coinbase said it had entered into a partnership Black Rock (BLACK -1.25%), the world’s largest wealth manager with more than $8 trillion in assets under management, to provide crypto trading services to institutional clients. And guess who is one of the investors featured in Rubenstein’s new book? Larry Fink, Chief Executive Officer of BlackRock. So Rubenstein has direct access to the mind of one of the world’s top money managers getting into crypto.
How to invest in crypto like a billionaire
When it comes to crypto, Rubenstein seems to really get it. On his own Bloomberg TV show, he recently interviewed Sam Bankman-Fried, the CEO of cryptocurrency exchange FTX and a highly influential figure in the crypto industry, known to many simply as “SBF.” In the interview, Rubenstein repeatedly asked about the maturation of the crypto industry and where it’s going, so he’s clearly interested.
It will be interesting to read Rubenstein’s new book as it includes investment lessons from some of the biggest names in modern investing. Presumably some of these lessons can be used to understand the best time to buy cryptocurrency.
As Rubenstein reminded CNBC viewers, an important lesson is that “the conventional wisdom is almost always wrong.” So if you’re overly fearful of a crypto winter and another drop in crypto prices, maybe it’s time to get a little more contrarian. There are many crypto bargains out there; you just have to know where to look.
Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and Coinbase Global, Inc. The Motley Fool has a disclosure policy.