Bitcoin is in the "mania" phase, with some people even borrowing money to get in on the action, securities regulator Joseph Borg told CNBC on Monday.
"We've seen mortgages being taken out to buy bitcoin. … People do credit cards, equity lines," said Borg, president of the North American Securities Administrators Association, a voluntary organization devoted to investor protection. Borg is also director of the Alabama Securities Commission.
"This is not something a guy who's making $100,000 a year, who's got a mortgage and two kids in college ought to be invested in."
Bitcoin has been soaring all year, starting out at $1,000 and rocketing above $19,000 on the Coinbase exchange last week. The price on Coinbase, which accounts for a third of bitcoin trading value, is often at a premium over other exchanges.
The cryptocurrency was trading at just under $16,700 on Coinbase at 2:21 p.m. New York time Monday.
"You're on this mania curve. At some point in time there's got to be a leveling off. Cryptocurrency is here to stay. Blockchain is here to stay. Whether it is bitcoin or not, I don't know," Borg said in an interview with "Power Lunch."
He also doesn't think futures contracts legitimize the digital currency.
Bitcoin futures, trading under the XBT ticker symbol, debuted on the Cboe futures exchange on Sunday night. The CME plans to launch its bitcoin futures Dec. 18.
While futures contracts are regulated, bitcoin itself is not. Borg said that's because innovation and technology always outrun regulation.
"As [technology] continues to accelerate and continues to increase, regulators have got to understand what it is that the innovation's coming up with and we're still trying to get educated," he said.
"We're looking at it from a money transmission point of view but that doesn't cover the entire bitcoin space."