Bitcoin rose $1,400 after futures trading opened Sunday on the Chicago Board Options Exchange, but the glow may soon wear off.

Loup Ventures managing partner Gene Munster said the latest development may weigh on bitcoin’s value, facilitating short sales and diverting investments from the currency to futures contracts.

Fundamental Risk

The risks compound sustained difficulty in the cryptocurrency market— regulatory uncertainties, resistance in retail use, exchange disruptions, and the complexities of buying in, using an exchange and engaging in transactions. These fundamental concerns muddy the bitcoin thesis.

“Bitcoin investors are betting on the price of Bitcoin rising, not on the practicality of the currency,” Munster wrote in a Monday note.

Basics Of A Bubble

The conditions seem to be setting up a familiar scenario.

“We are experienced financial market observers and lived through the last two bubbles in dot-com and real estate,” Munster wrote. “Maybe we’re still scarred from those, but it sure seems like crypto is in a bubble.”

Bitcoin has seen a recent explosion — quadrupling over the last three months and rising 1,552 percent year-to-date, according to Coindesk. Meanwhile, transaction volume, although steadily increasing, is up a mere 60 percent year over year.

“Two weeks ago, we had an Uber driver ask us how to buy Bitcoin,” Munster wrote. “We showed her how to sign up on Coinbase and she made the purchase before the end of our trip. A cautionary one-off story that illustrates the Bitcoin investor shift over the past year from tech-futurist, to professional investor, and now the general public.”

A Shiny Future

But based on the precedent of the Dot-Com bubble and internet, bitcoin isn’t fated for failure.

“We think cryptocurrencies, whether Bitcoin or something else, have a future in how consumers store wealth and transact,” Munster wrote.

Bitcoin traded north of $16,500 on Monday.