For what it’s worth, I’m rather skeptical of cryptocurrencies, including bitcoin. I am sure however, that investors should stay away from bitcoin stocks. While, there may well be some value in bitcoin and offshoots like Bitcoin Cash — the technology of the blockchain no doubt has utility — trading in bitcoin stocks at this time would be repeating the past mistakes of the dot-com bubble.

As is always the case with investing, price matters.

And from here it seems increasingly difficult to justify the prices paid for cryptocurrencies like bitcoin and ripple, let alone those created by smaller initial coin offerings (called ICOs). Value matters for bitcoin, in particular, because it’s simply a terrible currency, as I wrote earlier this month.

Of course, that’s just one man’s opinion. But what has to be a concern for cryptocurrencies themselves is the clear irrationality in the equity markets towards stocks exposed (however lightly) to the space. There’s literally zero argument at this point for any investor to buy bitcoin — or even blockchain — related stocks. And the huge moves in those plays, as many people have noted, are reminiscent of the dot-com bubble.

As someone who worked in a brokerage house at the peak of that bubble, I too see the similarities. And no matter what bitcoin itself does, bitcoin stocks are likely to end up the same way their dot-com predecessors did: at zero, or close.

Blockchain Stocks Go Nuts

The most recent beneficiary of the crypto craze is Eastman Kodak Company (NYSE:KODK). The company announced a new KodakCoin and is also offering a financing deal for a cryptocurrency mining product.

KODK stock started to pull back in Thursday’s trading, but it’s still up 167% since its Monday, Jan. 8 close as of this writing. Yet, as InvestorPlace’s Luke Lango wrote last week, KODK stock has little chance of being a blockchain winner. The legacy business actually is in significant decline, and it seems likely that the company is headed for a second bankruptcy.

Kodak isn’t even the biggest, or the craziest, beneficiary.

Longfin Corp (NASDAQ:LFIN) went public just last month, and now is worth $2.5 billion. The optimism comes from the company buying Ziddu.com — a company of which no one had ever heard and which appears to be linked to Longfin’s CEO. That CEO himself told CNBC that “this market cap is not justified“.

Riot Blockchain Inc (NASDAQ:RIOT) transitioned from a “life sciences tools company” to a supposed blockchain leader. Its stock quadrupled in a matter of months.

And even the most direct cryptocurrency play on the public markets is overvalued.

The Bitcoin Investment Trust (OTCMKTS:GBTC) is exactly what it sounds like: a company that simply owns bitcoin. And yet, according to figures from the company’s own website, the equity price values its bitcoins at 50% more than their market price.

No Reason to Buy Bitcoin Stocks

All of these stocks look overvalued, and in many cases massively so. And it’s important to remember that they’re still overvalued even if cryptocurrency itself isn’t a bubble.

There’s no reason to pay ~$20K for a bitcoin through Bitcoin Investment Trust when they’re available at $13K+ through direct purchase (or, now, the futures markets). There’s no reason to think that Longfin or Riot Blockchain are going to make real inroads and justfiy — in LFIN’s case — a multi-billion dollar market cap when they have no experience, no expertise, and no real current business.

There may be some ways to find some modest value-add from blockchain. I wrote just last week that International Business Machines Corp. (NYSE:IBM) stock has a potential, long-term driver from its blockchain efforts. Major financials could benefit from quicker and cheaper processing through blockchain-based platforms. But these are modest, incremental benefits — accruing to entrenched players. The idea that RIOT or LFIN will outmaneuver those larger, more experienced companies is foolish to say the least.

Dot-Com Bubble All Over Again?

There are important lessons to remember from the dot-com bubble. The optimism toward what were then called “Internet stocks” wasn’t necessarily wrong. The Internet has been a transformative technology. The winners in the space have created billions of dollars in value.

But what happened in 1999 (and earlier) was that valuations simply went insane. It took even the winners years to recapture their bubble-era peaks. Amazon.com, Inc. (NASDAQ:AMZN) didn’t set a new all-time high until October 2009. It took Priceline Group Inc (NASDAQ:PCLN) nearly fifteen years to do the same.

And that’s the winners. Just because blockchain is a real technology doesn’t mean everyone will win. The Internet was a real technology, too. But, there were many more big losers in that era than they were big losers (Pets.com, Boo.com, Beenz, Flooz, Webvan, etc. etc.).

In this case, investors who believe in cryptocurrencies should just buy the currencies. Trying to get some sort of second-level exposure in stocks that are nothing more than trading vehicles is too complex, and too dangerous.

Bitcoin may have a years of appreciation ahead of it. Blockchain technology may turn out to be revolutionary. That doesn’t mean that individual bitcoin stocks, or blockchain stocks, are necessarily going to benefit.

And it certainly doesn’t mean that any of what right now are ‘hot’ stocks will be winners.

As of this writing, Vince Martin has no positions in any stocks or cryptocurrencies mentioned.