Cryptocurrencies have taken off. Just 12 years since the debut of Bitcoin, the first crypto, the total value of all cryptocurrencies has soared to more than $2 billion globally. That's more than twice the value of U.S dollars in circulation.

Lots of investors have jumped on the crypto bandwagon, including celebrity billionaires like Elon Musk. I'm steering clear. In the short term, Bitcoin and other cryptocurrencies are wildly volatile. In the longer term, they carry heavy regulatory risk—governments around the world very well might pull the rug out from under crypto.

First, let's look at crypto's volatility. Bitcoin, the flagship cryptocurrency, is billed by many as a store of value akin to gold, but its price has gyrated wildly since its inception. Bitcoin's price has fallen by 32% since it hit a high of $69,000 in November, for example.

Why is crypto so volatile? It doesn't have inherent value like gold, which can be made into jewelry or put to other uses, or stocks, which represent shares of real-life companies. It's not widely used in legitimate commerce—you can't buy groceries with it, for example, nor does the IRS accept tax payments in Bitcoin. The value of crypto is based simply on what people are willing to pay for it, and there's no reason it couldn't go to a fraction of today's price. Could its price go through the roof? It's possible, but I see crypto as a very expensive lottery ticket.

The biggest risk to crypto's viability, however, is that it represents a challenge to governments around the world. As an anonymous currency, crypto is beloved by criminals, including the hackers who breached Colonial Pipeline Co. earlier this year, disrupting energy supplies in several states, and demanded Bitcoin as ransom. Its fans also include drug dealers and others engaged in illegal commerce. The most infamous example of crimes involving crypto was the Silk Road case.

So crypto is a direct challenge to governments' ability to fight crime. But more importantly, it's a challenge to governments' ability to control the value of their currencies and the strength of their economies. Central banks like the U.S. Federal Reserve increase and decrease the amount of money in circulation in order to influence interest rates, control inflation and support the economy. A competing currency would undercut the authority that governments derive from controlling their currencies.

Even though governments around the world are still deciding how to regulate crypto, crackdowns have already occurred. For instance, the Chinese government has banned businesses from making crypto transactions. In the U.S., the House of Representatives recently passed a bill to create a working group of regulators, industry executives and others to start looking at how crypto regulation might work. Not surprisingly, crypto-industry lobbying groups are springing up to try to minimize regulations. I take it as a sign that industry players are scared. Back in May, Perianne Boring, the head of the Chamber of Digital Commerce, one of the crypto lobbying groups, warned the industry: "If we don't start planning and taking action soon, we have everything to risk."

One reason so many people are passionate about cryptocurrencies is the libertarian idea that they are free from government control. If that changes, how much luster will crypto lose? If U.S. and other governments take a heavy hand, will people flood back to the dollar?

While no one can predict the future, we can certainly gauge risks, and the risks involved with crypto are too great for the average investor to take. In my opinion, investors should heed the words of Bill Gates: "My general thought would be that if you have less money than Elon Musk, you should probably watch out."