Treat investing in crypto like a trip to Las Vegas after FTX's collapse, says billionaire investor David Rubenstein
- David Rubenstein warned investors to tread carefully around crypto after FTX's collapse.
- Crypto investing is like gambling because "you know you're probably going to lose," he said.
Buying crypto is like going to a casino because investors are more likely than not to lose their money, according to billionaire investor David Rubenstein.
The Carlyle Group founder said on Thursday that while investing in digital assets might make a fun social activity, they were unlikely to deliver consistent returns as long as they remain unregulated.
"If you go to Las Vegas and you like to gamble, you know you're going to lose money," Rubenstein told "Mornings with Maria" on Fox Business. "So if it gives you pleasure to gamble, okay, so take the amount of money you're happy to lose, fine."
"In crypto, maybe it's the same thing," he added. "If you like to watch the oscillations up and down and tell your friends about how much money you're making, fine, but you know you're probably going to lose that."
Rubenstein's comments come as crypto reels from FTX's recent bankruptcy filing.
He said that the collapse of Sam Bankman-Fried's exchange should serve as a reminder that the space still isn't regulated by the Securities and Exchange Commission, which let it avoid providing accurate financial updates and for some employees to use company funds to buy houses in the Bahamas.
"We should be worried because it's very risky, it's very complicated and people don't have the information they would have if it was properly regulated," Rubenstein said. "It really isn't regulated, and so it's the Wild West to some extent."
The combination of the collapse of major companies and rising interest rates have plunged digital assets into a brutal bear market this year, with bitcoin falling 64% to just under $17,000 and ethereum down 67% to about $1,200.
That should encourage retail investors to stay away from crypto investing, according to Rubenstein.
"Generally it's a very complicated area, it's not for people who are not professionals," he said.
"I don't think it's going to go away completely, but clearly it's been damaged a great deal and a lot of people are going to be suffering from this."