SALT LAKE CITY — An increasingly well-known digital currency — bitcoin — is making big waves in investment circles nationwide, but experts caution the cryptocurrency's skyrocketing value may be more virtual than actual.

The price of bitcoin has topped $18,000 this year, an exponential leap above the price of just over $775 only 12 months ago, according to Coindesk. And while the meteoric rise in value has been dramatic, analysts are concerned the “bubble” will burst in the not-so-distant future, leaving many would-be millionaires in financial shambles.

Launched in 2009, the price of bitcoin last week alone jumped from $11,000 to well over $17,000. That rocketing level of appreciation smells a lot like an irrational investor mania to many economists and financial pros, the kind that sent prices for unprofitable startup internet companies soaring in the dot-com boom. Those prices eventually came crashing down.

"I don't see any justification for bitcoin increasing to the level and degree that it has risen over the past year," said Robert Spendlove, economic and public policy officer for Zions Bank. "It's a typical bubble consistent with the kind of mania that we've seen in past bubbles."

Though he is concerned about the nature of bitcoin's rapidly rising price, he said there is some value in the technology behind it called blockchain. It's a kind of digital ledger that securely records transactions and prevents the same bitcoin from being spent twice.

He said his concern is for those investors who put "their life savings" into something like bitcoin, leaving them exposed to "an enormous amount of risk."

"If someone is sophisticated and prepared to lose everything that they put in, (then it's acceptable)," he said. "It's really more of a gamble than it is like an investment."

While he expressed concern about cryptocurrency, Spendlove said blockchain technology could "revolutionize" the way financial transactions are conducted, particularly online.

Mark Jansen, assistant professor of finance in the Eccles School of Business at the University of Utah, said bitcoin may continue its upward trend for a while longer, but if it begins to decline, the fall could be just as substantial as its rise.

"What we're observing now is a 'virtuous circle' in the purchase of bitcoin, with the increase in price leading to more investor interest," he said. "If at some point a lot of investors decide it's time to sell, we could observe a dramatic drop in prices."

Another local analyst concurred, believing that this current cycle is probably a 'bubble' waiting to happen and that bitcoin has 'a shelf life' whose usefulness will eventually expire. However, Andrew Keinsley, assistant professor of economics in the Goddard School of Business & Economics at Weber State University, said because of the potentially useful blockchain technology, the time may one day come for a sovereign government to take a run at creating its own cryptocurrency.

"It's only just a matter of time before seeing a central bank adopt something similar to (bitcoin)," he explained. "They could control the supply better to make it less volatile. They will control the supply just like they control paper money now."

He noted that wider acceptance would have to occur prior to development, so he projected five to 10 years before potential governmental development.

Like many others in finance, Barry Ritholtz, chairman and chief investment officer of Ritholtz Wealth Management, expects the bitcoin bubble to pop. The only question is when.

"Some people think it's early days, some people think it's late," Ritholtz said. "We'll find out in the not-too-distant future who is right."

Robert Shiller and Joseph Stiglitz, two Nobel-prize winning economists who've seen their share of speculative manias, recently have called bitcoin a bubble. Stiglitz went so far as to tell Bloomberg TV that bitcoin should be "outlawed."

Bitcoin was created in hopes it would become a new kind of currency that people could use outside of the traditional banking system, without backing from any country or central bank. It was also supposed to operate outside of government oversight, which has raised concerns that it will be a haven for criminals.

Unlike traditional currencies, bitcoin doesn't have a country backing it, a central bank, interest rates or a long history of exchange rates against other currencies, making it extremely difficult to place a value on. Its value is tied only to what people believe it's worth at any given time.

Despite the growing interest, bitcoin still is not widely accepted in stores to buy merchandise, and you can't deposit it at a bank. One of the problems with using it as a currency is that its value keeps bouncing around, sometimes very suddenly.

"We have seen bitcoin more as a speculative investment rather than an equivalent to cash," says J. Craig Shearman, spokesman for the National Retail Federation, the world's largest trade association of retailers. "Even if it were a foreign currency, you need to dependably know what the exchange rate is, and bitcoin doesn't meet any of those tests."

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One of them is worth over $10,000 and some experts say it could rise further. Bitcoin, the world's most popular virtual currency, allows people to buy goods and services and exchange money without involving banks, credit card issuers or other third parties.

Backers of bitcoin say it's about time for a new kind of currency that can be exchanged in private and secure ways. Its promoters include internet entrepreneurs Cameron and Tyler Winklevoss.

This week mainstream financial markets are for the first time allowing investors to make future bets on the direction of bitcoin, but bitcoins themselves will continue to be traded only on private exchanges, which are mostly out of reach of regulators.

Mark Fratella, a teacher who lives in Elmhurst, Illinois, bought some bitcoin "for the novelty of it" back when it was worth $700 or $800.

Fratella is holding onto his bitcoin, and buying a little more from time to time. He's also buying other cryptocurrencies, such as Ethereum and Litecoin. He's heard the talk of a bitcoin bubble.

"But I have also seen a few analysts talk about how, in the grand scheme of things, there are a relatively low amount of people into bitcoin and there is a huge potential for growth," he said. With the futures trade starting, Fratella thinks people who have been leery of its decentralized, deregulated nature will start buying into it, too.

The futures also give investors the opportunity to "short" bitcoin — that is bet that its price will go down — which presently is very difficult to near impossible to do.

Jamie Dimon, the head of JPMorgan Chase, has called bitcoin "a fraud" that will eventually "blow up." But Dimon also said he thought the blockchain technology was "good" and could be used to make transactions faster and easier.

For now, people keep buying bitcoin, even with all the talk of a bubble. To Ritholtz, the enthusiasm is a combination of the novelty of bitcoin, the built-in scarcity of it — only 21 million of them will ever be created — and the psychology of people being attracted to assets whose prices appear to keep going up.

"One of the first rules of investing is, only invest in things you understand," Ritholtz said. "If you want to speculate in a cryptocurrency and you don't understand it, you might get lucky for a while but those sorts of speculations don't work out well.

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