The head of one of Britain's leading financial regulators has warned people to be ready to "lose all their money" if they invest in Bitcoin.
"It's an odd commodity as well, as the supply is fixed".
And he denied that regulators were being left behind by the new technology of cryptocurrencies.
"I don't press for that providing people understand very clearly this is a very volatile commodity".
Bitcoin was near its all time high point on Friday morning, at $17,176.
Today it is worth £12,400.
The head of the central bank of Australia, Philip Lowe, described it as a "speculative mania" and many believe the present valuation is not sustainable.
"By adopting the name of cryptocurrency there is a risk that some people regard it as the same as what an economist would call a fiat currency", he said. Unlike fiat currency, bitcoin's value is not backed by a state or preserved by their central banks.
"Bitcoin is not that - it's not a currency".
He also pointed to the fact that bitcoin buyers and sellers are anonymous, something that has caused concerns that it is being used to facilitate financial crimes and launder money.
At present there are around 16 million.
The interview with Bailey comes after the Chicago Board Options Exchange (CBOE) this week allowed the trading of bitcoin futures. Bailey said he was not pressing for this change.
Bailey added that while there have not been any systematic threats, "Bitcoin needs watching carefully, but we're not there yet".