More investors are becoming interested in digital currency. A global poll from deVere Group—albeit, one that didn’t include Canadians—found that 62% of respondents would consider including cryptocurrency in their portfolios. And 70% who already hold cryptocurrencies said they plan to increase their exposure in the next year.

However, such sentiment makes those respondents speculators, not investors. So says a BMO report on digital currency, specifically focused on bitcoin. Bitcoin investors are “buying and holding because they believe [bitcoin’s] price will rise—the textbook definition of a bubble,” says the report, which lists several buyer-beware considerations.

A safer bet for investors is blockchain, the currency’s platform. Says BMO: “Investors would be wise to keep a watchful eye on companies developing and adopting this technology.”

Many analysts say blockchain will thrive. Compared to current systems, blockchain offers lower costs, greater efficiencies and faster processing times for recording transactions.

“Banks, governments and the real estate industry are just a few players seeking to reap benefits,” says BMO. For example, banks are looking to blockchain as a secure means of verifying payments. Other companies are developing blockchain to track healthcare records, for example, and improve voting systems.

Further, “Blockchain can run on any currency—including fiat currencies. Simply put, bitcoin needs blockchain, not the other way around,” says BMO.

Read: Bitcoin: currency, commodity or technology platform?

Hooked on a feeling

Investors drawn to bitcoin in the hopes of earning a big windfall should understand that bitcoin isn’t a true currency, and has no inherent value.

“Unlike assets such as stocks, bonds or real estate, bitcoin doesn’t generate earnings, income or rents,” says BMO. “This means it lacks the foundation for appraising its value.” In contrast, fiat currencies are “tethered to economic fundamentals and backed by governments and taxpayers.”

Instead of being based on sound fundamentals, bitcoin value is vulnerable to investor sentiment, evident in its wide price variation across countries and exchanges.

“Bitcoin is too volatile to be used as a store of value,” explains BMO. “If half its value was lost overnight, investors wouldn’t know whether it is now undervalued and worth buying.” That stands in contrast with a company’s shares dropping in a flash crash, where buyers would likely rush to buy at a time when the stock price is deemed attractive relative to earnings.

Read: How to use bitcoin to purchase goods

Intraday swings in bitcoin price can be in excess of 10%, and the currency tends to swing by more than 5% every three days. In comparison, the Canada-U.S. exchange rate only rarely exhibits intraday moves of 2% or more, says BMO.

Regulators take aim

As cryptocurrencies become increasingly widespread, regulators are sure to limit their impact on the financial system and fiscal revenues—which won’t bode well for cryptocurrency values. Regulators in South Korea have already put the squeeze on bitcoin, and Thailand announced plans to roll out proposed cryptocurrency regulation later this month.

Read: 3iQ Corp. launching fund that invests in multiple crypto-assets

Last week, the SEC issued strong warning about cryptocurrency exchanges and potential regulatory requirements, which sent bitcoin’s price lower.

Today, Google announced it will ban cryptocurrency ads, such as those for bitcoin, as well as related content like trading advice and cryptocurrency wallets. The new policies, which also ban other complex financial products, will go into effect in June.

The move follows a similar step by Facebook earlier this year. The social networking giant updated its ad policy in January to ban financial products often associated with deceptive practices, including those involving cryptocurrencies like bitcoin.

Read the full BMO report.

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The taxman comes for bitcoin users