Is bitcoin another tulip craze or a legitimate investment?

very instinct as an investor tells me to stay away from bitcoin, the online "crypto" currency invented by some mystery man and criticized by JPMorgan Chase chief executive Jamie Dimon on Tuesday as a "fraud."

Dimon, one of the most powerful voices on Wall Street, said he would fire anyone trading in it because it's "stupid."

"It's worse than tulip bulbs," said Dimon, referring to the 17th-century mania that ended in collapse. "It won't end well. It will blow up."

Like most American investors, I am into vanilla savings like mutual funds, stocks, bonds and cold, hard cash. I don't buy gold. I don't trade in options. No derivatives for me. I don't know how to trade in currencies. I don't even buy lottery tickets.

I don't know what to make of bitcoin. You can't eat it, wash in it, wear it, drive it. But you definitely can spend it. The price had risen 300 percent this year to more than $4,000, but bitcoin's value slipped Wednesday following Dimon's comments.

"It's quite speculative," said Arthur Levitt, former commissioner of the Securities and Exchange Commission. "I would consider investing in companies that use bitcoin, or trade in bitcoin. I'm not sure I would invest in bitcoin itself. It fluctuates for reasons that are hard to understand."

But crypto-currency is with us for the future, he said. "I don't know whether it will be bitcoin or ethereum, to name just two. But it's here to stay because of the disparity between countries where a monetary system is robust and countries where there is virtually no monetary system, this comes up as an alternative currency."

It was created by an unknown person in 2009 under the alias of Satoshi Nakamoto. Bitcoins can be used to buy merchandise anonymously, involving lower or no fees and no banks.

The currency is traded on "bitcoin exchanges" where people can buy and sell using various currencies. Bitcoins are a product of something called "blockchain technology," and they are stored in digital wallets that exist in the cloud or on people's computers.

The currency is unregulated and its future is uncertain. It is not tied to any government or country.

"I'm a bull about the technology behind bitcoin, but I don't buy it because I don't have confidence that I can predict the price," said Kevin Werbach, professor of legal studies and business ethics at the Wharton School at the University of Pennsylvania.

One adviser, who spoke on the condition of anonymity because he did not want to publicly endorse it as an investment, said he would encourage people to buy small amounts in case the price goes wild.

Why investors should be wary of bitcoin

"It's clearly a speculative bubble," Werbach said. "There is nothing that has happened that would justify the short-term run-up in the price. But that doesn't prove it's a bad investment. It may be we are seeing early signs of a long-term set of uses that will justify this price or a much higher price."

CNBC's Andrew Ross Sorkin said on "Squawk Box" Wednesday that he didn't know where to come down on Bitcoin. Allianz economist Mohamed El-Erian, one of the show's guests, said bitcoin has value but it's price is inflated because it is not going to see widespread adoption.

It's worth "at least half of what it is, a third of what it is," El-Erian said. He called it a "disruptive" technology but won't see widespread use.

Christian Catalini, an expert on the economics of digitalization, called most cryto-currencies today will probably not exist a decade from now.

"These are highly speculative assets, and extremely risky investment vehicles," said Catalini, as assistant professor for technological innovation at the MIT Sloan School of Management. "Right now there is a very high level of enthusiasm about crypto tokens and blockchain, and this has resulted in unrealistic expectations about the value of some of these tokens."

Catalini cautioned that "it's easy to dismiss Bitcoin unless you focus on what the major technological breakthrough behind it means for digital platforms. With Bitcoin, you have the ability to exchange a scarce, digital token across the globe without having to rely on an intermediary. This is a fundamental change in how we transfer value across the globe and how we design marketplaces."

"You can't advise anyone you like to buy bitcoin," Michael Farr, a Washington investment manager, said. "Upside volatility is always seductive. Downside volatility is excruciating. With no way to determine intrinsic value, any purchase is just gambling. If you want to gamble, go to Vegas. At least they'll give you a free drink when you lose."