New technology is upending everything in finance, from saving to trading to making payments.

There’s been plenty of news to keep bitcoin down this year, from plunging venture capital investment to rising skepticism about blockchain technology’s viability in the marketplace. Yet the cryptocurrency is trading at its highest levels since its insane bull run of 2013.

Today, bitcoin hit $788.49, surpassing the year’s high of $781.31, set on June 13.

Bitcoin’s rise is even more impressive when you zoom out from that chart. The currency is trading at its highest level since February 2014.

It’s still not quite at the levels reached in November 2013, when it had rocketed from about $100 a coin to over $1,100 a coin in about three months. But that was a particularly crazy time for bitcoin. Seemingly unlimited venture capital was pouring in as millions were being made (and lost) on the cryptomarkets.

Meanwhile, rumors of collapse swirled around Mt. Gox, then the world’s biggest bitcoin exchange, and then came the high-profile bust of the dark-web narcotics marketplace Silk Road, which perhaps wasn’t great for bitcoin’s reputation, but did wonders for its brand recognition and its price.

Then bitcoin’s price took a tumble. It spent most of 2014 and 2015 in a bear market, as attention shifted away from bitcoin’s use as a currency and focused instead on the promise of blockchain technology as applied to the world’s financial systems. Big banks, brokerages, and other operators of the globe’s financial plumbing believed they could use the technical ideas behind bitcoin to cut costs in their own systems, and increase both the transparency and speed of moving assets around.

Bitcoin itself was riven by an internal dispute over how best to scale up its transaction capacity. As bold-faced names from bitcoin’s technical community quit dramatically, rival cryptocurrencies like ethereum, which boasts more powerful features including the ability to execute “smart contracts,” emerged. It seemed bitcoin, with its endless bickering and faltering price, was destined for the rubbish heap of digital currencies. Silicon Valley lost interest.

All the while, though, bitcoin volatility fell to record lows; exchanges continued to professionalize (even the hacked ones); bank-backed blockchain projects failed to emerge from their labs; and rival currencies began to fall by the wayside. Ethereum, for example, imploded after a bold experiment in self-governing corporations went wrong. Against this backdrop, Bitcoin’s price quietly began to rise.

Precisely what bitcoin is being used for remains a mystery. Researchers from University College London, the University of Wisconsin at Madison, and Germany’s central bank recently attempted to map the bitcoin economy (pdf). They’ve established that it has gradually shifted, from being transacted among miners and used for online gambling and dark-web markets like Silk Road to being transacted among exchanges.

Fat protocols

Bitcoin is an instrument of financial speculation; what value the traders see in it remains open to interpretation. But there are some clues.

A new theory is emerging in Silicon Valley, led by prestigious investors like Union Square Ventures, about bitcoin’s worth. It’s what Union Square Ventures’ Joel Monegro calls the “fat protocol”—and it’s driven by the failure of heavily funded bitcoin companies to produce the kinds of spectacular results Silicon Valley expects, even as the value of bitcoin itself continues to climb.

Venture capital has usually been rewarded for investing in the application layer of the technology stack. Facebook and Google, for instance, are basically mega-popular applications built on top of the hypertext transfer protocol, the foundation of the web. But cryptocurrencies buck the trend. The underlying protocol keeps growing in value but the companies building applications never get anywhere close to that. All the bitcoin in circulation is worth $12.5 billion (and ethereum is worth over $700 million), for instance, but the biggest bitcoin companies are only valued at several hundred million, Monegro estimates.

The rule of thumb when it comes to fat protocol investing is this: ”The market cap of the protocol always grows faster than the combined value of the applications built on top,” as Monegro puts it.

The reason: Successful cryptocurrency applications drive up demand for the currency, or more specifically, the tokens that are coded into the currency’s protocol. For instance, when Dread Pirate Roberts dreamed up Silk Road, people embraced the idea of e-commerce for drugs, driving up demand for bitcoin to pay for them. An example that doesn’t involve contraband might be the Bitfinex exchange coming up with a peer-to-peer margin-trading mechanism, which presumably prompted more people to buy bitcoins to trade.

Polychain Capital, Numerai

The fat protocol rule, and the underlying feedback loop animating it, might explain bitcoin’s current price rise. Union Square Ventures and fellow bitcoin bull Andreessen Horowitz are shifting their bets accordingly. They’re now increasing their exposure to bitcoin itself, if not by buying coins directly, then by taking stakes in companies that do.

One such company is Polychain Capital, a new cryptocurency hedge fund. Andreessen Horowitz and Union Square Ventures have pumped $10 million into the firm, and into the fund itself. Polychain founder Olaf Carlson-Wee won’t say much about how his fund invests, except that it’s long-only and the goal is to get into blockchain assets at an early stage.

There’s also Numerai, a hedge fund of a different sort. It shares partially obfuscated financial data with anyone who wants it, and invites knowledgeable people to create trading algorithms with the data. It asks interested parties to submit predictions based on those algorithms.

These trade ideas are then incorporated into a larger framework and turned into actual trades by Numerai. If the ideas are profitable, they’re rewarded with bitcoin, which preserves anonymity. The fund has paid out more than $150,000 in bitcoin since its launch in December 2015, as Wired has reported.

Bitcoin: The honey badger of money

Bitcoin is turning out to have stranger uses than anyone initially expected. Instead of a currency of choice for online dealers, it’s turning out to be the best way to pay hyper-competitive data scientists. Instead of withering away without Silicon Valley’s attention, it’s starting to subvert venture capital’s most cherished ideas.

Maybe bitcoiners were right after all, when they christened the cryptocurrency “the honey badger of money.” As the meme goes, honey badgers just don’t care.