As with any revolutionary technology, it’s easy to make a long list of both the pros and cons of bitcoin. Bitcoin and other cryptocurrencies have already produced an untold number of millionaires. And with the price of Bitcoin and most altcoins down sharply since December, a lot of people are getting excited for the inevitable next rally.

At this time, however, the balance of bitcoin’s pros and cons favors the downside. Bitcoin still lacks a killer application, government regulation is increasing, technical charts look weak, and dubious Initial Coin Offerings (ICOs) are wreaking havoc on the market. For those reasons, bitcoin is unlikely to provide the same sort of big returns this year that it did in 2017.

Let’s dive into each of these problems further.

No Killer Applications

A discussion about the pros and cons of bitcoin has to take into account its potential uses. Since humans came up with primitive accounting, we’ve sought ways to store wealth. Be it shells, salt, precious metals, or more recently, fiat money, we’ve always tried to hold onto value from our labors.

Bitcoin is the latest challenger to these pre-existing monies. And bitcoin has some great advantages — including privacy and the ease of avoiding capital controls. In countries like Venezuela with a busted currency and dysfunctional government, bitcoin is a great store of value compared to other alternatives.

But a currency can’t achieve mainstream adoption from a few edge cases. In developed markets with functioning capitalist economies, it’s unclear what benefit bitcoin provides versus existing systems. So far, bitcoin transactions remain slow, and subject to high transaction fees. If I owned Visa Inc (NYSE:V) stock, I wouldn’t be too worried about bitcoin. Many tech-oriented sites such as Steam that used to accept bitcoin have given up on it. That’s due to the hassle of dealing with high transaction fees and an unpredictable and volatile exchange rate.

So far, the main uses of bitcoin seem to be for gray area or illegal activities such as buying narcotics, avoiding taxes and laundering money. There is great potential for blockchain in the real world. As of yet, however, there are few legal, efficient and game-changing applications using either bitcoin or blockchain.

That’s problematic for the crypto market, which is currently worth $400 billion. That’s the same as, say Exxon Mobil Corporation (NYSE:XOM) or JPMorgan Chase & Co (NYSE:JPM).

Increasing Regulation

One of the big pros to bitcoin originally was freedom from government interference. Crypto was the wild west. Investors and traders made a killing before the IRS, SEC, or other regulatory bodies got involved. That’s all changing in a big way, however.

The past 12 months have brought a major crackdown on crypto trading. Exchanges such as Bitfinex are now demanding customer information so that it can be shared with the IRS. Reports suggest that merely trading between one crypto, such as bitcoin, and another, such as Ethereum, is a taxable event. This will turn crypto, previously a market frontier, into an accounting headache. It also hammers at a main benefit of crypto: If the IRS can track all your transactions, how private or secure are your funds?

Additionally, the SEC is cracking down on new coin and token offerings. This isn’t necessarily a negative for the price of bitcoin itself — see below — but it will impede the growth of the crypto landscape. People were making new coins as a loophole to avoid government oversight necessary for IPOs and other traditional funding mechanisms.

The government is now enforcing the law on new ICOs, perhaps limiting the appeal of Overstock.com Inc (NASDAQ:OSTK) and other companies that intend to profit from having crpyto-driven market exchanges that would bypass the stock market.

Bitcoin Price Chart Is Weak

The price of bitcoin peaked last December, coming near the $20,000 per coin mark around the holidays. Bitcoin dropped back to $13,000 heading into the new year. On January 6, bitcoin made its 2018 high of the year at $17,000. From there, it’s been almost all downhill.

Bitcoin dropped to below $10,000 at the start of February, falling to as low as $7,000. It made two weak rebounds back to just above the $10,000-mark, but quickly lost that key technical level. Since March 6, bitcoin hasn’t closed above $10,000. The price of bitcoin has continued to deteriorate further since then. In April, it fell to the low 6,000s. Since then, the price failed just below the $10,000 level once more, and is now slumping again.

Technically, this is a classic set of lower lows and lower highs that marks a bear market. Each time bitcoin drops, it hits a lower trough than previously. And when it tries to bounce, it fails at a worse point. The $10,000-mark, which was previously a support level, is now overhead resistance. Until bitcoin can make a higher high (currently the $10,000 level must be breached), its chart remains ominous for bullish traders.

ICO Madness

In the dot-com boom, we got IPO madness. A bunch of tiny internet firms went public with little more than a business plan. They raised billions of dollars, most of which was lost within a couple of years. We’re now having ICO madness, where new coins are launched seemingly daily.

These new coins may seem harmless, since they are much smaller than bitcoin. But they dilute the marketplace, and leave speculators stinging with massive losses. Consider Dentacoin, for example, which shot from a $100 million market cap to almost $3 billion in the space of a week in January. The company intends to be the first “blockchain solution for the global dental industry.” Was there some need to put a record of our cavities on the blockchain? And would dentists find Dentacoin acceptance more useful than cash or a Visa card? In a speculative bubble, no one worries about these sorts of questions. Regardless, Dentacoin has already lost 90% of its value since January.

Multiply that sort of silliness across hundreds of new coins, and you get a polluted and watered down market. From outright scams to implausible business models, the crypto world is suffering from a swarm of hucksters and opportunists. This has attracted attention from the SEC, which recently made its own new coin offering as a parody of current market conditions.

Needless to say, the combination of scams and resulting government oversight are unlikely to bode well for bitcoin and crpyto’s long-term prospects.

At the time of this writing, the author held no cryptocurrencies. He owned XOM stock. You can reach him on Twitter at @irbezek.