Source: Bitcoin Wiki.

Investing in bitcoin is getting easier for those who have little understanding of its basics. And that's been fantastic for speculators, as such demand has driven up the price, which fuels more interest, demand, and even higher prices.

The question is: Does bitcoin really have a sustainable future?

The bullish case
SecondMarket, known for its role in trading private company stock and coloring the value of non-public companies, launched the Bitcoin Investment Trust in late September. The trust allows accredited investors to invest a minimum of $25,000 in bitcoin like they would a commodity. Though, as Felix Salmon explains, the fund comes with extra fees that could take away plenty of the potential upside. With its launch, SecondMarket also published a hopeful slide deck with the following table:

If Bitcoin Equals the Value of...Basis for ComparisonCurrent ValueImplied Value Per Bitcoin
Western Union (NYSE: WU) Money movement and transmittance platform $11.5 billion $966
PayPal Leading online payment network $22.8 billion $1,916
Monetary base of Turkey Emerging market currency $95 billion $7,983
5% of gold Primary global store of value $450 billion $37,815

Source: SecondMarket.

At bitcoin's current price, lately hovering around $300 from just $150 in October, the fund has performed extremely well with a net asset value per share of rising from $12 at its inception to $31 today.

The bear case
On the end of bitcoin skeptics, Western Union had its own presentation (link opens PDF) outlining the current issues of the digital currency. The company highlighted bitcoin's lack of liquidity and adoption, the immature consumer interfaces, and the regulatory issues that need to be addressed before it would be ready as a form of international money transfer.

However, Western Union has to bolster its case to stick around. New competition has forced Western Union to lower prices, and as a result, the operating margin for its consumer-to-consumer business, which makes up 80% of its revenues, fell to 19% from 25% for the latest quarter compared to a year prior. And Western Union is "keeping an eye on further developments" with bitcoin and other digital currencies.

The bull versus the bear
With each uptick in price, interest in bitcoin increases, and interest in keeping it around increases. There is plenty of financial interest backing its success, and for payment processors like Western Union, the opportunity to disrupt the current hegemony of credit card processors and banks might be more tantalizing of a prospect than fighting bitcoin's proliferation.

Bitcoin fills a niche of digital and frictionless exchange of value. While online purchases require the regular credit card authentication requirements of a billing address, bitcoin can be used as easily as handing over cash. There is value in this.

However, regulation is the largest question mark. State governments take in 22% of their revenue from sales taxes, the largest source outside of transfers from the federal government. Protecting this would be in their best interest.

The takeaway
The interest in new currencies will take awhile to die down, especially as they swing in price to their actual value. The unanswered regulatory questions add further complexity to investing in the currency. And there's reasons for established organizations to both trample it and champion it. Bitcoin's future is up in the air, like it's current price.

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Fool contributor Dan Newman has no position in any stocks mentioned. The Motley Fool recommends Western Union. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.