If last November you had pressed an economist on the life expectancy of the bitcoin, you would have likely heard a variation of the doctor’s worst words: “It’s not looking good.” The bitcoin, a digital currency that operates free from central authority, was furiously shedding value, having lost nearly 95 percent of its spending power in the five months prior. By the time its freefall thudded to a halt around the two-dollar-a-coin mark, many of bitcoins’ biggest supporters had turned their back on the cryptocurrency.

Yet for the past three months, bitcoin has been making a quiet resurgence. As of today, the bitcoin is enjoying its highest value in nearly a year. What happened?

In short, it seems that people are finally learning what the bitcoin is good for. When the virtual currency was released in 2009, there was a good degree of speculation as to how exactly the bitcoin would work as a medium of exchange. What could you purchase with it? Who would accept it? Born from a code designed by an unknown programmer, bitcoins drew the notice of the Internet-savvy who were intrigued by the possibility of the secure, cheap, and—most importantly—anonymous transactions that the digital currency made possible. The problem lay in the fact that there was at first almost nothing people could buy with their bitcoins.

But the much more damaging speculation came in the form of investors, who hoarded the currency in the hope that it would boom amid a surging network of users and fawning from the media. “The bitcoin shot up a year ago because of blog posts and attention, and then there was a bubble,” said Paul Steinbart, a professor of information systems at the W.P. Carey School of Business at Arizona State University who is co-authoring an upcoming paper on bitcoins. “People treated it as an investment.”

Of course, the popping of the bitcoin bubble on June 8, 2011, didn’t put a stop to the speculation. With values so low, almost any change in price had to be in the upward direction, meaning you could follow the mantra and sell high. (Here I will offer a mea culpa: In November, I made a small purchase of bitcoins with no intent on using them as a substitute for the dollar, though as a casual numismatist, I also saw the bitcoin as a natural addition to my modest collection.)