Why these college students are skeptical of bitcoin

CNBC recently spoke with college students at City Tap House, referred to simply as "Tap" by University of Pennsylvania students, to find out how they feel about 2017's most controversial currency.

Many students admitted they saw the appeal in bitcoin. "My cousin invested in bitcoin and he's made a lot of money," said one student.

"It's something that a lot of people could have bought into early on, like maybe five to 10 years ago, and now the value is skyrocketing," said another.

Even though the students seemed to appreciate the potential gain from investing in bitcoin, most said they were either unable or unwilling to make the jump.

University of Pennsylvania campus
Ann Hermes | The Christian Science Monitor | Getty Images
University of Pennsylvania campus

"A decentralized currency is a pretty incredible thing," said one student. "I don't have the money to buy bitcoin right now, absolutely not. But if I could, I would."

Another student, dressed in a full suit, explained why he thought bitcoin was a bubble bound to burst: "I'm a bitcoin skeptic. I think it's sort of a fraud," he said. "I mean, there's a history of bubbles in all sorts of different assets it's not exclusive to bitcoin. It's not the first bubble and I don't think it's going to be the last."

"Its an overvalued asset that's bound to burst sooner or later," said similarly professional student.

History seemed to be informing many of the skeptical student's views about the cryptocurrency. "I mean just the history of the stock market, the longevity of it," said one young man. "It's definitely more favorable than just buying an actual bitcoin or anything like that.

Bitcoin millionaire Grant Sabatier
Bitcoin millionaire Grant Sabatier

Grant Sabatier, founder of Millenial Money, became a millionaire by investing in bitcoin five years ago, but he agrees that buying the cryptocurrency is not a sound financial decision — especially for young people.

"Even though I'm a bitcoin millionaire, I don't recommend that you invest in it today," he writes for CNBC Make It.

One reason Sabatier is hesitant to suggest others invest is because it is currently impossible to accurately estimate bitcoin's value.

"Because so many new people are buying it (and so quickly!), it's impossible to accurately value," he says. "When the price of anything fluctuates 20 to 30 percent in one day, it's obviously unstable, so you could lose all of your money very quickly."

"Most people aren't buying into the value of the technology, they're buying into the hype," he argues. "This is gambling, not investing."

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