Lionel Laurent is a Bloomberg Gadfly columnist covering finance and markets. He previously worked at Reuters and Forbes.

Bitcoin has hit a new record of more than $3,300. Just another day at the office for a crypto-currency that's risen 50 percent in one month, 200 percent in six months and 30,000 percent in five years.

But the surge tells us more about the speculative games being played by Bitcoin traders than its future as a credible method of exchange. With the currency's rules going through some potentially big changes, volatility and complexity are increasing. Bitcoin might be more valuable but it's not getting any less risky.

The latest price jump has the hallmarks of a kind of relief rally, as traders bet it can ride out those changes to its underlying market structure.

Another Record
Bitcoin monthly price in U.S. dollars shows three-hundred-fold increase in five years
Source: Bloomberg

The launch this month of an offshoot called Bitcoin Cash was one test. It was designed to fix many of the technical issues hampering the broader adoption of Bitcoin, but its price has gone south even as Bitcoin's has kept rising. That reassures those faithful to the core Bitcoin currency.

This is only a prelude to an even deeper potential split, driven by two competing visions of how Bitcoin should handle bigger transaction sizes. So the past week's price moves have soothed fears about a shock to the biggest crypto-currency out there.

Bitcoin exchange-traded note has outperformed commodities and equities over past year
Source: Bloomberg

Yet the early response to Bitcoin Cash shows us how labyrinthine and erratic this world can be, with exchanges and investors behaving in unpredictable and inconsistent ways. The Coinbase exchange, for instance, said it wouldn't support Bitcoin Cash. That prompted users to withdraw their holdings from Coinbase and led to 12-hour withdrawal delays, according to reports.

The rival Bitfinex platform, meanwhile, supported Bitcoin Cash and even came up with a solution to help Bitcoin short-sellers. But it found itself attacked by "large-scale manipulation tactics" from traders who sniffed the opportunity to get Bitcoin Cash for free, as Bloomberg View colleague Matt Levine noted. 

These kind of antics explain why Bitcoin is becoming ever more volatile, even if the price is rising. Its 30-day volatility index is at its highest since early 2015, according to Bloomberg data. Being forced to move Bitcoins from one exchange to another and working out what to do with a fresh influx of Bitcoin Cash won't do much for price stability.

More Volatile
Bitcoin 30-Day Volatility Index is at its highest since 2015
Source: Bloomberg data

There are also fears that big traders are having an undue influence on the price of Bitcoin, with one blogger flagging the actions of "Spoofy" -- a nickname for traders who apparently place million-dollar orders without actually executing them. Bitcoin is essentially unregulated, so risks are abundant.

Still, plenty of people are willing to bet Bitcoin will just keep on rising. They may be right. But if volatility goes up too, that won't help its take-up in the real world.

The changes being made to Bitcoin are meant to speed up transaction processing times, which are acting as a deterrent to the currency's wider adoption, though they haven't been implemented yet. While Spoofy and his or her chums might be having fun, that's not so reassuring for those wanting something more solid.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Lionel Laurent in London at

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James Boxell at