Digital cryptocurrency bitcoin hit a record above $1,200 last week. That’s in large part because of speculation about the potential launch of the first-ever U.S. bitcoin ETF, but it also may be because of the uncertainty around all manner of investments in 2017.

After all, bitcoin’s advocates claim that it is a safe haven asset akin to gold. And according to a recent CNBC analysis, the digital currency has “performed better than any other currency in every year since 2010 apart from 2014.”

In an age where central banks in Europe and Japan continue to keep rates in negative territory and accusations of currency manipulation are a fixture of the Trump administration, you can understand why a digital currency like bitcoin has some appeal.

But it’s worth noting that bitcoin BTCUSD, -0.59% is notoriously volatile, and that its underperformance in 2014 was highlighted by a tremendous flop of about 70% from roughly $950 in January to under $300 at the end of that year. And since the currency has digital roots and was launched less than a decade ago, it’s also a popular target for internet crooks — from small-scale phishing scams targeting would-be investors to hackers making off with a cool $65 million in bitcoin from Hong Kong exchange Bitfinex.

Read:Bitcoin is now worth more than an ounce of gold for the first time ever

So what’s the future of bitcoin? Will an ETF launch legitimize the digital currency and create a new option for investors looking to diversify into alternative assets? Or will the ups and downs of bitcoin continue, with a lucky few winning on their gamble even as volatility and outright criminal activity bankrupt others?

Here are some pros and cons of investing in this digital currency:

Pros

Long-term staying power: Bitcoin has reached roughly $19 billion in market value — about 60% more than the total value of the digital currency during its previous peak in the 2014 “bitcoin bubble.” That rise hasn’t been without serious volatility, of course, but the long-term gains in the last few years are dramatic as the currency has soared from roughly $15 as the start of 2013 to roughly $1,200 at present.

Playing nice with regulators: Despite a bitcoin user base that is sometimes generalized as libertarian or even anarchistic in their politics, there are many digital currency advocates who are quite comfortable playing by the rules of Washington and Wall Street going forward. A representative of the Bitcoin Foundation, for instance, told policy makers in 2013 that the organization wishes to “craft a sane regulatory environment,” and that it is comfortable with oversight so long as “rulemaking is open and transparent.” And outside the U.S., digital currency advocates in Australia and India are pushing self-regulation as a first step toward a shared set of rules in these marketplaces. This is all very good for the future of bitcoin as a legitimate alternative asset.

CIO Network: The biggest cyberthreats facing the U.S.

Bitcoin isn’t the problem – bureaucracy is: There is a very real risk that the SEC will continue to drag its feet and we may not see a bitcoin ETF in the near future. But that could be a commentary on market bureaucracy rather than the future of bitcoin. As the former head of ETF listings at the New York Stock Exchange recently told MarketWatch, “Bitcoin is new and different, and there’s no incentive for regulators to be innovative.” Even if there are setbacks, the rapid adoption of bitcoin is encouraging — and like many technologies, it simply needs to wait for everyone else to catch up. Being an early adopter has been highly lucrative for bold investors in recent years, and things may only improve as the market and merchants catch up.

Cons

Crazy volatility: Bitcoin is hardly the only volatile investment out there. Take three-times leveraged gold miner investments Direxion Daily Gold Miners Bull 3X ETF NUGT, +0.21% and Direxion Daily Gold Miners Bear 3X ETF DUST, -0.18% as the poster children of aggressive, short-term instruments that can make a lucky few rich… or bankrupt the unprepared.

In a typical retirement portfolio, there is no real place for bitcoin — or leveraged ETFs or naked short selling or other risky strategies.

CIO Network: Who's hacking us and why

Hackers and scandals: The 2015 Silk Road scandal and the 2016 Bitfinex theft are pretty dramatic examples of the risks that come with an asset that isn’t tangible. And even if you just isolated incidents, you have to acknowledge what such events do to investor sentiment. Just as the Wells Fargo WFC, +3.33% fraud scandal of 2016 had real consequences for the stock, further data breaches or bitcoin thefts could create huge headwinds for bitcoin investors and the adoption of the cryptocurrency. Throw in continued chatter about how bitcoin is the preferred currency for drug lords and sex traffickers, and even the most enthusiastic supporter must admit the risk of real tarnish to the bitcoin brand if these headlines continue.

Bitcoin’s big risk is its big reach:A 2016 report from a group of regulators that includes the Treasury, the SEC and the Federal Reserve warned that risks of bitcoin “may not become apparent until they are deployed at scale” and specifically highlighted potential problems arising simply because of the speed and volume of transactions.

There are plenty of other honest reasons to be concerned … but when bitcoin’s biggest systemic challenge is simply executing transactions and reliably integrating into the financial system, that is a big red flag. It doesn’t mean bitcoin doesn’t have staying power, but it should warn investors of just how risky this currency remains despite talk of a mainstream ETF.

Now read:Has bitcoin matched gold’s status? One expert weighs in