The value of the electronic currency Bitcoin has gone bananas in the last five weeks, blasting from about $35 a coin in early March to a new high of $145 last night.

Bitcoin has now blown through my previous price target.

So it is time to raise that target again.

So I'm raising my Bitcoin price target to $400.

Just kidding.

I don't have a Bitcoin price target.

And the idea of raising a Bitcoin target to "$400," I should explain, is sort of an inside joke:

Fifteen years ago, when I was a stock analyst during the Internet boom, I put a $400 target on the stock of Amazon.com. Amazon was a highly controversial stock at the time — many people thought the company was "just a bookstore" and would "never make money" — and the stock had already reached what some people viewed as an insane level. I didn't think that predicting that Amazon could go to $400 was particularly radical — that was one of many possible scenarios supported by the numbers. But my target "plucked the chords of the zeitgeist," as the writer Jay McInerney once said about a book of his, and suddenly everyone had something to say about it.

(Fortunately for me, Amazon soon blasted to $400 and beyond. And after a seven-year fallow period, it has continued to do well. On a split-adjusted basis, my "$400" target is about $67 in today's Amazon stock).

But!

If I were going to put a price target on Bitcoin, I would think that $400 would be a perfectly reasonable target.

Unfortunately, so would $1,000.

Or $2,000.

Or $5,000.

And, because you're probably already getting ready to blast me for "irresponsibly fueling speculation," so would $0.

That's right: $0.

Nada.

Nothing.

If the government comes in and declares Bitcoin illegal, or if someone figures out how to hack or counterfeit Bitcoin, or if Bitcoin speculators suddenly wake up one morning and collectively panic, Bitcoin prices will plummet. And there will no "fundamentals" for the value of Bitcoins to fall back on.

That's something to keep in mind as you watch the Bitcoin frenzy build.

A couple of days ago, I called Bitcoin the "perfect bubble."

What I meant is that Bitcoin has all the elements required to become a massive speculative bubble ... along with the additional attribute of not being constrained by any "fundamental" value whatsoever.

Specifically, Bitcoin has:

A good underlying story. If you don't know why some intelligent folks are excited about the Bitcoin concept, you should take the time to understand. Bitcoin is a new form of currency that is accepted worldwide and can never be debased by politicians trying to get re-elected or countries trying to pay off huge debts. In a world in which the value of paper money is constantly ravaged by inflation, that's a very attractive attribute. Also, the world is very much ready for a "global" currency — a currency in which all things in all countries can be denominated. Bitcoin satisfies that need, too. And barring hacks, etc., it's safer and easier than carrying around sacks of cash. And so on.

If you don't know why some intelligent folks are excited about the Bitcoin concept, you should take the time to understand. Bitcoin is a new form of currency that is accepted worldwide and can never be debased by politicians trying to get re-elected or countries trying to pay off huge debts. In a world in which the value of paper money is constantly ravaged by inflation, that's a very attractive attribute. Also, the world is very much ready for a "global" currency — a currency in which all things in all countries can be denominated. Bitcoin satisfies that need, too. And barring hacks, etc., it's safer and easier than carrying around sacks of cash. And so on. A sexy "new-ness" that requires some work to understand. Right now, some smart people have analyzed Bitcoin and found it compelling and fascinating. Most normal people, however — to the extent that they've even heard of Bitcoin — assume it's just a silly speculative plaything. As more of the Great Dismissive Majority understand that there's actually something to Bitcoin, at least in theory, demand for the currency will increase.

Right now, some smart people have analyzed Bitcoin and found it compelling and fascinating. Most normal people, however — to the extent that they've even heard of Bitcoin — assume it's just a silly speculative plaything. As more of the Great Dismissive Majority understand that there's actually something to Bitcoin, at least in theory, demand for the currency will increase. A small and finite supply. The whole premise of Bitcoin is that only a finite amount of it will ever be created. This is in stark contrast to standard currencies, the supply of which is continually increased. The more people want Bitcoin, therefore, the more its value should rise. It's simple supply and demand.

The whole premise of Bitcoin is that only a finite amount of it will ever be created. This is in stark contrast to standard currencies, the supply of which is continually increased. The more people want Bitcoin, therefore, the more its value should rise. It's simple supply and demand. A fundamental "value" that is highly subjective and, therefore, justifiable at almost any level. How much is Bitcoin really worth? No one knows. Depending on the assumptions you make, you can justify almost any value. When it comes to persuading people that they should feel okay buying something for more than it used to be worth, that's a helpful quality.

How much is Bitcoin really worth? No one knows. Depending on the assumptions you make, you can justify almost any value. When it comes to persuading people that they should feel okay buying something for more than it used to be worth, that's a helpful quality. A high level of risk and excitement associated with trading it. The main reason Bitcoin is captivating everyone's attention right now is that the price of Bitcoin continues to explode higher. You don't have to be George Soros to know that what goes up can also go down, and the fact that Bitcoin's value could crash at any second makes "playing" it exciting. This risk also makes people feel smart for playing it and winning — which most people who are playing Bitcoin right now are doing.

So Bitcoin has everything it needs to become a major speculative bubble.

But the difference between Bitcoin and, say, the 1990s Internet bubble, is that there really is no fundamental way to value Bitcoin.

In theory, the fundamental value of a stock is "the present value of future cash flows" that the company will produce. The $400 target I put on Amazon in 1998, for example, was based in part on long-term revenue and profit projections for the company.

But Bitcoin does not generate any cash flows.

Business Insider The only "cash" that Bitcoin will generate in the future is cash that comes from someone who buys it from you (or accepts it as payment for something).

So the "fundamental" value of Bitcoin can only be estimated the same way the fundamental value of, say, gold can be estimated — which is guessing at what someone will be willing to pay for it at some time in the future.

That attribute creates more risk for Bitcoin speculators. But it also creates more potential upside. Because there is nothing to constrain the price of Bitcoins other than what other people are willing to pay for it.

Another thing to keep in mind about asset bubbles is that the big ones take years to develop and hit their peaks.

The dotcom stocks, for example, were dismissed as a "bubble" way back in 1995 ... a full five years before the peak.

The housing market was called a bubble in 2003 and 2004, many years before prices peaked.

And in the intervening years, the folks who accepted the risks and played the game made money hand over fist.

It's also important to note that both dotcoms and houses have created massive sustainable value despite going through a "bubble" era. Yes, prices fell. But the value of the Internet sector is now vastly higher than it was at the peak of the dotcom bubble. And some day the same will be true for houses.

Today, the excitement around Bitcoin is still confined to a tiny segment of the population — technology aficionados, monetary idealists, drug dealers, and, increasingly, speculators.

This means that if Bitcoin prices continue to rise, there are hundreds of millions of new "players" who might enter the market and increase the demand for Bitcoins. This new demand could radically increase the demand (and price) for what will ultimately be a finite supply of Bitcoin.

This increase in demand, if it occurs, will almost certainly not be steady.

Instead, Bitcoin demand will increase in fits and starts ... with booms like the one we've seen over the past month followed by busts in which prices crash and everyone who did not buy in feels smug and smart. And then the process will repeat again, with a much higher high, followed by another interim bust. And so on.

That's the way the great bubbles build.

And Bitcoin could certainly become a great bubble.

Of course, given the ongoing risk of hacking, counterfeiting, new supply, and government intervention, along with the technological challenges (it's really hard to figure out how to use Bitcoin), the interim crashes could be sharp and scary.

And they could also be permanent.

But, for now, the Bitcoin boom still appears to be in its early stages.

So if I were still in the price target business, maybe I would raise my Bitcoin price target to $400.

Or $1,000.

Or $5,000.

Because there's no reason why Bitcoins couldn't eventually be worth that much.

And it's worth noting one last thing:

The odds Bitcoin speculators are looking at are similar to the odds early Internet speculators were looking at:

The most you can lose is 100% of your bet.

The most you can make, meanwhile, is theoretically unlimited.

And in some circles, assuming only a limited amount of capital is wagered, those odds are what might be described as a "good bet."

So let the speculation continue!