Yet cryptocurrencies, such as bitcoin, are also a bubbly, frothy, and overhyped phenomenon—a latter-day version of a penny stock, boosted by drug dealers, digital evangelists, Wall Street types, and a large twinset of Harvard rowers. Sure, sophisticated investors are pouring money in. But neophyte investors are charging bitcoins to their credit cards. A company called Long Island Iced Tea, purveyor of virgin lemonades and steeped drinks, added “blockchain” to its name and saw its stock price jump as much as 500 percent. Companies are raising vast sums on the public markets via initial coin offerings. The prices of various currencies are spiraling around like a loose tab of acid lost in a dust storm at Burning Man. It is getting weird out there.

Regulators are taking notice, concerned that beside the explosion of legitimate investment in digital currencies lurks a whole lot of old-fashioned consumer fraud, self-dealing, market manipulation, and false advertising. Among them is Joseph Borg, the director of the state of Alabama’s securities commission, who recently voiced his concern that people were mortgaging their homes to get in on the hype. I spoke with him as the price of bitcoin was in the midst of plummeting 30 percent in a day, to a point at which it still would have grown tenfold in a year. The interview that follows has been lightly edited for clarity.