Bitcoin might seem like an odd retirement asset: Most investors lack real knowledge of it, and it holds only a minuscule share of the $24 trillion U.S. retirement and pension fund asset market. However, it might soon play a much larger role in your retirement future.

The technology behind Bitcoin is expected to transform the global financial markets in the years ahead, making transactions easier and more convenient worldwide, which could ease its adoption as a retirement asset. But the currency has its drawbacks. Retirement advisors consider bitcoin risky, volatile, unregulated and unsuitable for long-term investments. Here’s what you need to know before including bitcoin in your retirement strategy.

Related: 28 Retirement Mistakes People Make

The Basics of Bitcoin

Bitcoin is considered a transformational invention because it acts both as a digital currency and as an open source software called blockchain technology.

As a digital currency, bitcoin can be managed electronically from anywhere in the world. It also is becoming more widely accepted by banks and merchants. In its other form, as an open source software, the bitcoin blockchain platform, which serves as a public ledger of all bitcoin transactions, is being used by institutional traders and software developers to transform the operational and transactional sides of the financial industry.

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Yet while institutional market users hail bitcoin as a new force that is capable of changing the administrative side of financial markets, average investors are still scratching their heads over its importance.To be sure, some investors were attracted to bitcoin after watching its big swings in value. According to CoinDesk.com, the Bitcoin Price Index was at $13 on January 2, 2013; $1,147 on December 4, 2013; and $534 on February 25, 2014. Of course its value also can plunge dramatically, and it faces many other hurdles as a retirement asset.

The Regulation of Bitcoin

Financial regulators and the courts are not clear about how to classify bitcoin. Recent rulings have found it to be a cash equivalent, a security, a commodity and a foreign currency. This confusion explains why regulators are uncertain about its legal and regulatory jurisdiction.

The IRS contends that bitcoin is considered property in the United States. This means an investment structure cannot directly own bitcoin, but it can hold bitcoin as part of shares in an investment trust. It has only been allowed into the retirement accounts of accredited investors and even then, it had to be through the Bitcoin Investment Trust.

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Then, there are the operational hurdles. “As of right now, major IRA custodians won’t accept bitcoin investments in a tax-advantaged account. So at this point, if you want to invest in bitcoins, the simplest way is to outright buy them,” said Andy Brantner, a certified financial planner and investment blogger at Start Investing Online.

Related: Cryptocurrency Taxes: How Is Bitcoin Taxed?

The Risk of Bitcoin

“Bitcoin is an interesting piece of news to follow, but it’s certainly not something I’d recommend including in a long-term investment portfolio, especially with an IRA,” said Elle Kaplan, CEO of LexION Capital Management in New York. “I always stress a long-term investment approach — particularly for your Golden Years and bitcoin definitely does not fit in that picture.

“Bitcoin is not a stock, not a bond and not a recognized currency that any government issues or supports,” Kaplan said. “It’s also completely unregulated and completely uninsured. While the stories of bitcoin’s dramatic rise in value, from pennies to hundreds of dollars each may seem appealing in the short-run, the majority of its value could disappear in a split second. Bitcoin is something that could disappear in a year. It is not something to depend on in a decade,” she added.

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Bitcoin is an electronic currency, so merchants who receive it cash it in at its face value to pay salaries, bills or just take it home as profit. In almost all cases, bitcoin is spent immediately. As a result, it trades at, or often less than, its face value, according to futurist and writer Giulio Prisco.

The Volatility of Bitcoin

“Bitcoin is a very risky investment because its valuation is mostly driven by speculation. People who use the bitcoin network for transferring value generally don’t care about the exchange rate because they enter and exit the system fast enough to avoid being exposed to much volatility,” said Jameson Lopp, an engineer at a bitcoin startup in Durham, N.C.

This might help explain why the price of bitcoin dropped 60 percent from January 2014 to December 2014, according to the Coindesk Bitcoin Price Index. Similarly, the average daily price change of bitcoin versus the U.S. dollar between July 2010 and August 2013 was 0.7 percent, which “is quite a lot compared to other assets,” according to Bitcoin Magazine.

Bitcoin might be considered a risky retirement investment today, but it seems to have a bold future for changing the way financial transactions are conducted. This means investors looking to include bitcoin in their retirement portfolios need to separate the speculative from the qualities that make something an attractive long-term investment.

Related: Facebook Could Be Rolling Out its Own Version of Bitcoin