Although bitcoin and other cryptocurrencies are edging closer to the mainstream financial markets, they remain a bad bet for retirement savers.

The public shares offered by Coinbase put a market valuation of some $85 billion on the cryptocurrency exchange. Innovation-focused Ark Investment Management and its founder Cathie Wood have made big bets that cryptocurrencies will become an asset class for institutional investors. The electric car company Tesla recently boosted its quarterly earnings with its Bitcoin stake. A nearly yearlong rally has pushed valuations to an estimated $2 trillion.

Still, the limitations and uncertainties about « crypto » are unsettling. Despite their name, cryptos aren’t as efficient as currencies. Better to think of them as an asset. The most common analogy is gold. It’s sobering to think that Dogecoin, the cryptocurrency created as a joke, has soared 12,000% this year.

I’m among the crypto skeptics, although I may be proved wrong with time. The pandemic accelerated the shift to a digital-based high-tech economy and, not surprisingly, speculators are racing to take stakes in the technologies of tomorrow. Among those bets are cryptos. Another is non-fungible tokens, or NFTs, which have attracted large sums to the art and collectibles markets. Imagine, a JPEG by the digital artist Beeple sold for $69 million at auction. The frenzy in the crypto market is driven by the potent combination of tales spun about our high-tech financial future and speculative fears of missing out on the action.

Little wonder veteran investors see financial history repeating itself. With valuations driven into the stratosphere — 12,000% for a parody crypto? — a bust seems inevitable (although history offers little guidance on when).

My practical household finance concern is about the growing interest in evaluating crypto as a good investment for retirement savings, mostly through self-directed IRAs. I am an emphatic no on this option. Crypto prices are too volatile, their underlying fundamentals too uncertain and signs of a speculative frenzy too apparent to hold any place in retirement savings.

« In time, some of the above challenges might be overcome and it makes sense for me to consider cryptocurrencies as part of your portfolio, » writes Patrick Zumbusch, founder of Wellspring Financial Partners in Tucson, Ariz. « Until then, they feel more like Kryptonite, and even Superman struggled when that material showed up. »

Good advice.

Chris Farrell is senior economics contributor, « Marketplace, » and Minnesota Public Radio.