Bitcoin crossed the $1,000 mark last week and continues to rise, forcing analysts who had previously dismissed the cryptocurrency as either too unstable or untested for investing to give it a second look. “This literal price explosion suggested taking another look at this currency to determine what is driving its success. I still find that what I do not know or understand about this currency and the cryptocurrency phenomenon far outweighs what I do know,” writes Rafferty Capital Markets vice president of equity research Richard X. Bove, in a frank admission that Bitcoin is new territory that no one should claim to fully understand.

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“In delving into cryptocurrencies there is a good deal of religion – i.e., faith that the systems actually work. It is unlikely that the average user or investor will ever understand how this system actually does work,” he writes.

Bove’s analysis lays out basic risks

Bove doesn’t take a position on whether Bitcoin is worth investing in, or whether it will even be around five years from now, but it’s interesting to read the thoughts of such an accomplished investor trying to come to terms with what had been the domain of the IT crowd basically until this year.

Also see: Bitcoin: The Rise and (Inevitable) Fall

For people with an active interest in Bitcoin, Bove’s report is pretty basic, but it does a good job of laying out the basic problems still facing the currency: its value is unstable, the transaction speed is quite slow relative to major payment methods such as Visa Inc (NYSE:V), and it’s possible for the system to come under attack from a large organization or nation, and Bove thinks that China may be trying to do exactly that.

Bitcoin’s rise noteworthy, perhaps not invest-worthy

For many analysts, Bitcoin’s incredible rise seems to be its own justification, but prices being driven by the prospect of higher prices have a way of creating a bubble and then collapsing. But even if Bitcoin doesn’t work out, the idea of using cryptocurrencies for secure, anonymous transfers with low transaction fees is certainly attractive, and it’s easy to imagine applications aside from acting as a universal currency.

“The concept of creating a new currency that is limited in size and not controlled by any government has great appeal,” writes Bove. “Maintaining some understanding of the developments in this sector is important particularly for financial analysts where currency is the raw material of the business.”