This year may very well go down in the books as the year of the cryptocurrency. After beginning the year with an aggregate market cap of $17.6 billion for all cryptocurrencies combined, the more than 1,100 digital currencies -- as of Sept. 30, 2017 -- accounted for $146.5 billion in market cap. That's a nine-month increase of 732%. Comparatively, the broad-based S&P 500 has taken well over two decades to deliver that sort of return.

Of course, the one-two punch within digital currencies belongs to bitcoin and Ethereum. Bitcoin, the largest cryptocurrency by market cap, is up more than 300% year to date, while Ethereum, the second largest, has gained more than 3,600% in nine months. Together, bitcoin and Ethereum make up $100 billion of the aforementioned $146.5 billion cryptocurrency market cap.

Two tangible catalysts pushing bitcoin and Ethereum higher

Why have digital currencies like bitcoin and Ethereum been on fire? The most logical explanation is the excitement surrounding the technology known as blockchain that underpins these currencies. Blockchain is the digital and decentralized ledger that allows transactions to be recorded and stored without the need for a financial intermediary like a bank. Most blockchains are also open source, meaning that it would be practically impossible to alter data without someone else knowing. This makes blockchain uniquely secure.

We've already begun to see a number of real-world tests involving blockchain technology. The Enterprise Ethereum Alliance is composed of more than 150 organizations currently testing a version of Ethereum's blockchain in pilot or small-scale projects. Similarly, bitcoin recently implemented a software upgrade, known as SegWit2x, following its fork into two currencies (bitcoin and bitcoin cash), which should help it to appeal to enterprise customers. This upgrade allows for more capacity, quicker transaction settlements, and lower transaction fees.

The other tangible catalyst here has been the falling U.S. dollar. Uncertainty regarding whether the U.S. economy can continue growing, especially with little in the way of major legislation working its way out of Washington, has weighed on the dollar. Typically, investors will seek the safety of gold when the dollar is falling. Gold has been used as currency for centuries and is a finite resource, which is why it's a perceived store of value.

However, bitcoin is also being viewed by some investors as a perceived store of value. Its protocols allow for a maximum of 21 million coins to be mined, which makes bitcoins somewhat of a "finite" resource. Its 300%-plus return this year has also run circles around gold, which is up by 11% year to date.

Surprise! This high-profile investment firm is now mining bitcoin and Ethereum

But one of the most interesting aspects of bitcoin -- and the cryptocurrency run in general -- is the fact that because it has no central bank-backing and isn't recognized as legal currency in most countries, most financial institutions won't go near it. CEO Jamie Dimon of JPMorgan Chase (NYSE:JPM) said in an interview recently that if any JPMorgan employees were actively trading or holding bitcoin, they'd be "fired in a second." This has left retail investors to largely determine the price of bitcoin and other digital currencies.

Yet, despite the cryptocurrency's being a big unknown, one big-name investment firm has decided to take a chance on bitcoin. Abigail Johnson, the CEO of Fidelity Investments, which has around $2.3 trillion in assets under management, recently announced that her company has been dabbling in various aspects of bitcoin and Ethereum -- and it's been profitable in doing so.

As reported by Quartz and The Financial Times, Johnson spoke about her company's ventures into bitcoin at Consensus, a bitcoin-themed conference in New York. In addition to allowing its customers to view their cryptocurrency balances based on what digital currencies are being held through CoinBase, Fidelity has also been actively mining bitcoin and Ethereum for a profit. According to The Financial Times, Fidelity acquired its mining hardware from 21 Inc.

One firm doesn't make a trend

The fact that Fidelity is now mining bitcoin helps add some degree of legitimacy to the long-term investment argument into digital currencies. It also adds to the number of big-name companies involved in cryptocurrencies in some way. For those who may not recall, some large businesses have been accepting bitcoin as payment since 2014.

However, it's also important for investors not to get carried away by this announcement from Johnson. There are still some clear-cut issues that bitcoin and other digital currencies need to contend with. Regulation is obviously a worry, albeit a two-headed one. On one hand, regulating the bitcoin market would provide legitimacy that the currency holds value. On the other hand, it also leaves bitcoin open to be deemed an illegal currency. Recently, China and South Korea have cracked down, or announced crackdowns, on initial coin offerings, with China taking it a step further and aiming to shut down domestic cryptocurrency exchanges.

Another issue that bitcoin could deal with is that the barrier to entry for digital currencies is exceptionally low. As noted, blockchain is where the real value of these digital currencies lies. We've witnessed an absolute explosion in the number of launched digital currencies, along with big businesses banding together in some instances to create their own virtual currencies. In August, six global banking giants announced that they were banding together to create their own coin currency, demonstrating how easily the existing digital currency juggernauts could be upended in the future.

There's also no clear evidence to suggest what blockchain technology is really worth. While some investors have valued bitcoin based on its uptake as a peer-to-peer payment platform, this payment platform isn't really worth much. Blockchain is where bitcoin's future lies, but there are few guarantees that its blockchain will be among those preferred by big business.

In other words, while bitcoin investors should be glad that Fidelity is taking a chance on bitcoin, it doesn't materially change the uncertainties that still cloud its future.