Bitcoin prices are in a bubble. To recognise this, one need only look at the cryptocurrency’s vertiginous path to its current peak of more than $16,000 — and then recall that it has no intrinsic value. It is not productive like oil, and no government stands behind it. It is not even physically attractive, as paintings, gold and tulips are. As of today, the sole legitimate reason to buy bitcoin it is to sell it later for a higher price.

Should anyone care about this? There is now quite a bit of nominal value behind bitcoin. Multiply the price by the number of bitcoins and the result is more than $270bn — roughly the market capitalisation and double the book value of Wells Fargo, the third-largest bank in the US. There is reason to think still more money is going to flow to bitcoin. Two major exchanges, the CME Group and Cboe Global Markets Global Markets, are about to launch bitcoin futures exchanges. Historically, asset bubbles ascend to their wildest heights after derivative trading is introduced. Such trading is easier and less capital intensive than cash trading and delivery of the underlying asset.

It is telling that Wall Street banks, usually keen to cash in on the sudden popularity of innovative derivatives — mortgage-backed credit default swaps, say — are encouraging regulators to review bitcoin futures more carefully. They have reason to be nervous. Any bitcoin futures trades will have to pass through clearing houses, where defaults are covered by member institutions, such as the brokerage arms of the big banks. If a mass of trades go bad, for example because a crash in the bitcoin price leaves lots of traders unable to make good on their trades, the clearing house could end up holding the bag.