3. It’s the reserve currency of the ICO market.

What’s an ICO? An “initial coin offering” is essentially a way for a company to crowdsource funds without selling shares. Instead of accepting public money in exchange for equity, as in an initial public offering, or IPO, an ICO offers digital tokens denominated in a new cryptocurrency.

The conventional wisdom on ICOs is somewhat split. Some see it as an ingenious way for founders to quickly raise money without relying on the gatekeepers of venture capital. Others point out that it’s easy way to con poor dolts looking to buy into the crypto frenzy. And what a frenzy it is: In 2017, the ICO market exploded, raising more than $2 billion for new companies.

There are several ways that the ICO craze feeds, and is fed by, the bitcoin boom. First, some analysts believe that the most lucrative ICOs are driven, not only by gullible rubes, but also by bitcoin millionaires who want to diversify their investments without paying tax by cashing out of cryptocurrencies, which would trigger a capital-gains tax. ICOs fulfill that need.

Second, many ICO investors first convert their cash into bitcoin before buying tokens in a new cryptocurrency. As Tim Lee argues, this makes bitcoin the “reserve currency” of the crypto economy. Just as the U.S. dollar benefits from its status as the world’s reserve currency, accepted worldwide in lieu of or in exchange for the local currency, the same is often true of bitcoin in cryptocurrency markets. It’s possible that these factors work together in a feedback loop, where bitcoin millionaires seeking diversification raise the profile of ICOs, which increase the value of bitcoin.

This much is clear: Bitcoin’s valuation has gone nuts in tandem with the (perhaps equally nuts) boomlet in ICOs.

4. Maybe it’s just this simple: Bitcoin is an unprecedentedly dumb bubble built on ludicrous speculation.

It seems strange to call a currency a bubble. But lacking more specific terminology, bubble seems like the only word that would apply.

Even if one buys the argument that blockchain is brilliant, cryptocurrency is the new gold, and bitcoin is the reserve currency of the ICO market, it is still beyond strange to see any product’s value double in six weeks without any material change in its underlying success or application. Instead, there has been a great and widening divergence between bitcoin’s transaction volume (which has grown 32 times since 2012) and its market price (which had grown more than 1,000 times).

Surveys show that the vast majority of bitcoin owners are buying and holding bitcoin to exchange them for dollars. Let’s be clear: If the predominant use case for any asset is to buy it, wait for it to appreciate, and then to exchange it for dollars, it is a terrible currency. That is how people treat baseball cards or stamps, not money. For most of its owners, bitcoin is not a currency. It is a collectible—a digital baseball card, without the faces or stats.