The bitcoin digital currency can expose people to significant losses, fraud and theft, and the lure of a potential quick profit should not blind investors to its significant risks, a brokerage industry watchdog warns.

In an investor alert titled "Bitcoin: More than a Bit Risky," the Financial Industry Regulatory Authority (FINRA) said Tuesday that recent events such as the bankruptcy of bitcoin exchange operator Mt. Gox have spotlighted some of the currency's risks.

"Speculators drawn to bitcoin trading should understand that bitcoin prices have fluctuated widely, and wildly," said Gerri Walsh, FINRA's vice president for investor education. "Investors looking to get in on the ground floor of a bitcoin-related company should realize that fraudsters may see the latest digital currency trend as a chance to steal their money."