Bloomberg News Bitcoin is soaring to record heights, hitting the $1,000 mark Friday for the first time, but financial advisers aren't biting — yet, anyway.
The virtual currency passed the quadruple digit price shortly before 10 a.m. on the Mt. Gox exchange and has since soared higher than $1,020. That marks a gain of about 5,000% from the $20 level at which Bitcoin was trading at the start of this year.
Despite the hype, many advisers are steering clear of the online currency, which is unregulated by central banks and traded freely on the Internet. Because the digital currency is so new and its rise has been so fast, advisers are doing their homework before investing clients' money.
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“I'm probably even less interested in it now,” said Phil Christenson, an adviser and portfolio manager at Phillip James Financial. 
Snapshot of the Mt. Gox Bitcoin tracker, chronicling the currency's rise. Source: Mt. Gox
“Because it hit that $1,000 mark, [investors] think it's going to go to $2,000, going to go to $5,000,” he said. “This is probably the time to ignore it.”
Bitcoin was originally dismissed as a serious investment when it first began to surge early this year. It was known for being extremely volatile, and not many businesses accepted the digital coins as actual currency.
Since then, the currency has seen a boom that rivals the Beanie Baby bubble of the 1990s. As its value has grown, well-known Internet names, including OKCupid, Reddit and WordPress now accept the currency on their sites.
Even some physical stores, including a pizza shop in Vermont and a plastic surgery clinic in Miami, let customers swap Bitcoins instead of cash.
And Virgin Galactic is taking Bitcoin as payment for its upcoming space trips, according to Forbes.
After Thanksgiving, Bitcoin is scheduled to gain additional attention through a Bitcoin Black Friday event, in which hundreds of outlets are offering their goods for the virtual currency.
Jennifer Failla, principal and founder of Failla Financial Management LLC, said that she hasn't placed any of her client's money in Bitcoin yet.
However, more of her clients are approaching her about the currency, and her firm is performing due diligence on Bitcoin, researching issues such as encryption and open source code.
“I know far more about Bitcoin now than I did four months ago,” Ms. Failla said.
“If a client comes to us, we'll sit down and take the proper steps to research it,” she said. “I wouldn't say we're at that point where I'm ready to pull the trigger and buy.”
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Although Ms. Failla said that it still might be too early to gauge Bitcoin's success as an investment, it is something that she may consider once her due diligence is complete.
Her firm isn't! a traditional stocks and bonds practice and has had clients do things like physically bury gold and silver, she said.
“What we're trying to mitigate is the hype around the viability,” Ms. Failla said. “As think-outside-the-box wealth managers, it's definitely something we're going to continue to keep an eye on.”
Bitcoin's meteoric gains this year have been contradicted by gold, another asset class that verges on being traded as currency.
This week, gold has traded just above a 34-month low, according to Bloomberg.
The asset has declined more than 25% since the start of the year and is set to mark its first yearly drop since 2000.
Despite Bitcoin's huge gains this year, Mr. Christenson said that investors and advisers shouldn't be tempted to put their money in an investment that is due for a downward shock.
“If you look at a chart, it's just gone straight up,” he said.
“If Bitcoin was a stock, I'd seriously be considering selling some of it. I wouldn't be buying it,” Mr. Christenson said.
If investors are interested in Bitcoin, he recommends setting aside a small portion of a portfolio to use for fun.
But don't bet the farm on it, Mr. Christenson said.
“These things come and go and some people make money on them, but you will lose money on it if you try to jump in now,” he said. Like what you've read?
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