Dana Byerlee, 33, of Santa Monica, prepares to use one of Southern California's first two bitcoin-to-cash ATMs, in Locali Conscious Convenience store in Venice, Los Angeles, California, June 21, 2014. REUTERS/Lucy Nicholson LONDON – Cryptocurrency Bitcoin isn't technically money in the full sense of the word, according to analysts at Bernstein.

While it allows transactions in a similar way to cash, Bitcoin is still just a "censorship-resistant asset class," out of the reach of state control and yet to form a part of the system of settlement and credit that defines money.

"Fiat money is still the final form of settlement – governments still collect taxes in fiat money and salaries are still paid in fiat money," a team of analysts led by Gautam Chhugani and Gaurav Jangale said in a note to clients on Wednesday.

"Thus, for now, Bitcoin has only emerged as a 'censorship resistant' asset class," Bernstein said.

The cryptocurrency, which is hovering around the $4,800 mark, is more like an economy run by its users rather than a threat to mainstream money.

"Bitcoin could be seen as virtual 'bearer cash' economy supported by a decentralized 'trustless' network – a new crypto economy with its own protocol or policy," Bernstein said. "The faith of its citizens– software developers, miners, investors, early individual and sovereign state adopters would drive the value of that network."

Bitcoin hit nearly $5,000 at the beginning of September, but quickly saw its price decline amid news of a crackdown in China and criticism from JPMorgan CEO Jamie Dimon. After bottoming out near $2,900 per coin on September 15, it has since rallied.

Bernstein said that money evolved as a system of keeping track of and clearing IOUs, rather than as a metal token in lieu of a barter system, a function that Bitcoin is yet to fulfil in the wider economy.

Here's the chart to explain: