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The bitcoin frenzy right now is like dot-com bubble in 1995, digital currency hedge fund manager says

Matthew J. Belvedere

Investors should be careful of the euphoria that's propelled bitcoin to past $15,000 just hours after crossing $14,000 because it's very early days in cryptocurrencies, BK Capital Management founder Brian Kelly told CNBC on Thursday.

"If you look at the internet in 1995, that's where you are in digital currencies," said Kelly, portfolio manager of the BKCM Digital Asset Fund.

While bitcoin is the largest, with a market value of around $250 billion, and a nearly 1,900 percent increase in the past 12 months, there have been a wave of cryptocurrencies in recent years. Two other big ones, ethereum and litecoin, have seen even larger 12-month gains, 5,100 percent and 2,600 percent, respectively, according to a main digital currency platform CoinBase.

"To be clear, there will be in this space. There are," said Kelly, referring to the online pets retailer that's become one of the symbols of the dotcom excess of the 1990s-era. Founded in 1998,, which even advertised during the Super Bowl, went public in February 2000 and shortly after achieved a $100 million market value. But it went out of business about eight months later.

"I have no idea if bitcoin is going to be one [to prevail]," he admitted. "Just like the internet."

In the meantime, Kelly who calls himself a "value speculator" in digital currencies is investing in bitcoin, which he said traded more than Apple shares last week. He said there's plenty of liquidity on the platforms that enable trading in digital currencies, so investors who want to sell won't have problems finding buyers.

"As much as I love bitcoin, an asset that goes straight up, investors have to be careful," said Kelly, author of "The Bitcoin Big Bang — How Alternative Currencies are About to Change the World." "That being said, there's a massive runway here digital currencies."

Kelly also said he sees greater opportunity in ethereum than bitcoin. "There are thousands of the smartest minds working on building stuff on top of [ethereum]."

In addition to trading bitcoin in the unregulated cash market, the CME Group and Cboe Global Markets are set to unveil bitcoin futures , which add a layer of federal government oversight.

Andrew Busch, chief market intelligence officer at the Commodity Futures Trading Commission, which approved the exchanges' plans, told CNBC on Wednesday, "Our role as a derivatives regulator is to make sure the futures contract it's not manipulated. We're going to do that for sure."

Cboe bitcoin futures are set to begin trading on Sunday. The CME contracts are slated to launch on Dec. 18. Nasdaq , meanwhile, plans to launch its own bitcoin futures as early as the second quarter of 2018.

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