The fascination with virtual currencies feels more like a "speculative mania", the head of Australia's central bank has said, just days after the launch of the world's first bitcoin futures.
Bitcoin, the world's biggest and best-known cryptocurrency, surged past $17,000 yesterday to an all-time high, an almost 20-fold increase in its price this year.
Wild gyrations of 10-30% in a single day is quite common in bitcoin, which was last up 1.5% at $16,900.
Investors have increasingly grown optimistic that the $20,000-mark is now within reach.
To tap in to the rapidly rising investor interest, Chicago-based derivatives exchange CBOE Global Markets began futures trading in bitcoins on Sunday, while the CME Group is expected to launch its contracts on December 17 .
But Reserve Bank of Australia governor Philip Lowe said it was hard to see bitcoins being used for everyday transactions.
"When thought of purely as a payment instrument, it seems more likely to be attractive to those who want to make transactions in the black or illegal economy, rather than everyday transactions," Lowe said.
"The value of bitcoin is very volatile, the number of payments that can currently be handled is very low, there are governance problems, the transaction cost involved in making a payment with bitcoin is very high and the estimates of the electricity used in the process of mining the coins are staggering," he stated.
The comments come days after his New Zealand counterpart said bitcoin appeared to be a "classic case" of a bubble, and cast doubt on its future.
"Bitcoin is to me very much like gold," Grant Spencer, acting governor of the Reserve Bank of New Zealand, said. "It's mined, it has a fixed quantity and the price is very volatile."
"I think a cryptocurrency that has a more stable value will be the sort of cryptocurrency that is more useful for the future," Spencer said.
"I think they are part of the future. But not the sort that we see in bitcoin," he added.
