The cryptocurrency surged to a record $9,732.76 on Monday, according to coin industry site CoinDesk, breaking a mark set during Thanksgiving weekend. It later retreated to around $9,655 at midmorning.
"Bitcoin has gone parabolic, so that usually doesn't end well," said Cashin, UBS director of floor operations at the New York Stock Exchange.
"I think we're in the fear-of-missing-out phase now," Cashin said in an interview on "Squawk on the Street." "I think initially there was some concern. I am told — and take this with a huge grain of salt — that the movement is even beginning to worry some people in the Federal Reserve."