Bitcoin's price continued to soar this week, flying past the US$17,000 (S$23,000) mark on Thursday before it dipped on profit-taking.
Its value to the dollar, however, varies depending on which exchange is used, because the cryptocurrency does not yet trade on major centralised exchanges and has no legal exchange rate.
What has fuelled the surge, which began about a week after the cryptocurrency touched US$10,000, is the fact that bitcoin futures trading will start this weekend.
But going mainstream could prove to be the undoing of bitcoin, which in the recent frenzy has largely shaken off its seedy past as a currency of choice for black-market deals online.
Cboe Global Markets, which owns what was formerly the Chicago Board Options Exchange, rolls out bitcoin futures trades tomorrow evening, while the Chicago Mercantile Exchange's parent CME Group will do so on Dec 18.
The apprehension about bitcoin was raised by Futures Industry Association chief Walt Lukken, in a letter to United States Commodity Futures Trading Commission chairman Christopher Giancarlo. The association and its member firms, Mr Lukken wrote, "are apprehensive with the lack of transparency and regulation of the underlying reference products on which these futures contracts are based and whether exchanges have the proper oversight to ensure the reference products are not susceptible to manipulation, fraud and operational risk".
Mr Oriano Lizza, a sales trader at CMC Markets in Singapore, told The Business Times that bitcoin's arrival on legitimate exchanges "could lead to a 'cooling-off period' as centralised exchanges get a foothold over the digital currency - something digital currency lobbyists do not want to see".
He added: "Although not a traditional financial instrument, we could see traditional market cycles take over and exhaustion occur."
Mr Frank Troise, managing partner at investment firm SoHo Capital, said bitcoin would falter under increased scrutiny on exchanges.
"It's a fool's game because I'm trying to sell it to you, you're trying to sell it to me, and no one wants to be the last one holding on to this."
Dr Douglas Streeter Rolph, an adviser to SoHo Capital and a senior lecturer at Nanyang Technological University's Nanyang Business School, said: "One of the things about using bitcoin as a means of transaction in business is that, if your underlying business is in dollars, there's a lot of volatility."
But moving onto a formal exchange, he predicted, "is going to reduce the exchange risk, which is a very big part of bitcoin now. The move makes it more attractive for people to use bitcoin".
Market watchers are also divided on what is behind the latest spikes on the bitcoin exchanges.
Mr Daniel Liebau, founder of research and advisory firm Lightbulb Capital, said: "All cryptocurrency prices, including bitcoin, currently seem to be appreciating mainly because of capital inflows, and not because of the value being created by individual blockchain projects."
Mr Lizza said: "What we are seeing now is institutional investors looking to diversify their portfolios and, from a risk perspective, institutional bodies buying physical bitcoin in order to offset their overall exposure."
Mr Troise disagrees. "Every institutional investor that I speak to sees it as one of the most prolific bubbles that they've come across," he said. "The only reason this has been surging is because of retail buyers."
