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Bitcoin has not recovered, fully. The price of the crypto asset has fallen more than 12% in the last month to around $14,600, according to the most recent quote on Coinbase. Shares of the Bitcoin Investment Trust (GBTC) has risen more than 30% over the last month, but its net asset value has actually fallen about 7%, according to Morningstar.

Tightening regulation in China and South Korea is, in part, responsible for the decline. China's crackdown last year included banning initial coin offerings or ICOs and limited trading to over-the-counter markets, slowing down the process and possibly increasing credit risk. And authorities have reportedly ordered a gradual exit of mining operations.

Photographer: Michael Short/Bloomberg

Financial authorities in South Korea said they were investigating six local banks that offered digital currency accounts, checking to see if they are complying with anti-money laundering rules, among other things.

In a report published Wednesday, Goldman Sachs (GS) analysed the potential of bitcoin as a form of money. Analyst Zach Pandl suggests it can facilitate transactions, but just in theory. He acknowledges that the demand for cryptocurrencies could be related to "dissatisfaction" with regulated monetary systems with Google Trends showing that search concentration for "bitcoin" in the last five years was in Nigeria, South Africa, and Ghana -- all places with unstable currencies and/or restrictions around foreign exchange use.

Pandl also sees evidence of a "classic speculative bubble" and that over the long run, crypto as currency may not pan out. "We should stress that, as money, cryptocurrencies should have low expected returns in the long run, despite their high returns recently," he wrote. Under the assumption that crypto returns should be equal to or lower than global real output growth in the low single digits, the analyst said: "Digital currencies should be thought of as low/zero return or hedge-like assets, akin to gold or certain other metals."

The contradiction is not lost on Pandl. How could bitcoin or other cryptos both generate high returns, which investors have witnessed recently, and also be considered a store of value? No answer for that one.

UPDATE: Due to an editing error, the headline of this story didn't match the content. It has been corrected.