Institutional investors are avoiding Bitcoin, saying it is the most crowded trade in global markets.
On Monday, the crypto-currency experienced a surge in trading volume that boosted it to $7710 a coin ($US6026) and surpassed a market capitalisation of $127.9 billion ($US100 billion) for the first time in its history.
Mainstream curiosity and frenzied speculation have seen Bitcoin rise more than 500 per cent so far in 2017.
However, this most recent rally is largely thanks to another upcoming split in the technology, and the creation of an alternate asset called "Bitcoin Gold".
The split would distribute a Bitcoin Gold token for every existing Bitcoin holder, and traders are expecting a Bitcoin Gold market to establish itself very quickly, like the previous split when Bitcoin Cash was developed.
But financial institutions and sophisticated investors, while conceding the technology that underpins crypto-assets is interesting, have kept their fiat money largely out of the game.
Bank of America Merrill Lynch asked institutional investors in September what they though the most crowded trade in financial markets was, and for the first time offered "long Bitcoin" as an option.
Some 26 per cent of investors surveyed said it was, the most popular response.
The lack of regulation around crypto-assets means money managers the world over are wary of investing.
"There's no real asset backing or regulatory oversight, and that's a bit concerning," says Omkar Joshi, portfolio manager at Regal Funds Management.
"At the end of the day, there's no real clarity about what the legitimate necessity of Bitcoin is, so it's not something we look at as an investment."
Regulators are making moves
While money managers are wary of investing, Australian regulators have taken steps to place some parameters around the growing use of crypto-assets like Bitcoin and blockchain-based assets.
This week, Parliament is expected to vote on a bill granting AUSTRAC - the government's financial intelligence agency - powers to police crypto-currency exchanges.
"Businesses that trade digital currencies for money, and vice versa, will be required to enrol and register with AUSTRAC," Justice Minister Michael Keenan said in a parliamentary speech about the bill in August.
The bill comes just weeks after ASIC released guidance on when crypto-assets (not just Bitcoin) issued via an initial coin offering might be classified as a managed investment scheme, an offer of shares, an offer of a derivative or a non-cash payment facility.
Bitcoin is a crypto-asset that allows the transference of value between entities without a third party, and unlike currencies and securities, Bitcoin is a line of computer code.
Anybody with an internet connection and a Bitcoin wallet can buy and sell Bitcoin on exchanges throughout the world.
New gold?
While there are rumours Goldman Sachs has set up a Bitcoin trading desk, the investment bank has this week released a note to clients arguing Bitcoin is not the "new gold".
Commentators have likened the crypto-currency to gold because of its finite supply and its price rises that sometimes align with geopolitical tensions.
But Goldman Sachs has argued gold is still a better store of value than Bitcoin.
"Gold wins out over crypto-currencies in a majority of the key characteristics of money," the bank's analysts wrote in a note to clients.
The analysts said that digital wallets, where people can store crypto-currencies, are vulnerable to hacking and still have "significant regulatory risks".
