Why did bitcoin’s price surge more than 200% this year?

It has been an annus horribilis, but not for bitcoin.

The cryptocurrency is up over 200% this year and has been on a steady tear over the past few months. At press time, a single bitcoin was valued at about US $23,300. Only 90 days ago, it was trading just above $10,000.

For many bitcoin doubters, the sudden spike is reminiscent of the 2017 holidays, when, as one of my Quartz colleagues recently observed, “you could not stand in a group of three or more dudes and not talk about bitcoin.” That was the year bitcoin hit its previous all-time high, just over $19,700, before plummeting by 30%. Naysayers are watching for another drastic correction now.

However, investors and traders who believe bitcoin is more than a Ponzi scheme say that the 2020 surge is different, mainly because of who is shopping for it. Three years ago, the enthusiasm for the digital coin came from retail investors. This time, some major institutional investors have decided to join the market.

In May, Paul Tudor Jones, the billionaire hedge fund manager and founder of Tudor Investment Company, made a splash by buying bitcoin, still a fringe asset to investors of his stature.

Jones was actually dipping in for the second time. In 2017, his fund bought and sold bitcoin, exiting near the asset’s all-time high, Bloomberg reports. This year, watching central banks spend billions to offset losses from the coronavirus pandemic, Jones went looking for a reliable hedge, according to a market outlook note he wrote in May, and bitcoin met his criteria.

“I am not a hard-money nor a crypto nut,” he also stated in the note. “The most compelling argument for owning Bitcoin is the coming digitization of currency everywhere, accelerated by Covid-19.”

(Jones has said he holds between 1-2% of his fund’s total assets under management—pegged at $9.2 billion in 2020—in bitcoin.)

Meanwhile, bitcoin’s ever-rising market price also made a lot of customers of a cryptocurrency asset manager called Grayscale a lot richer this year. Grayscale Bitcoin Trust, which launched in 2013, sells publicly traded shares in trusts that hold bitcoin, a way to circumvent regulations against bitcoin ETFs. In short, it has created a route to owning crypto that feels safer to mainstream investors, and therefore worth a hefty premium. In January, it became an SEC reporting company, which meant more investors would be qualified to buy into the trusts. Its total assets now stand at $13 billion, up from $2 billion only a year ago, and this year its inflows reached $1 billion per month. Investors who feel most comfortable in stocks and bonds clearly have some FOMO.

Just days ago, Michael Saylor, CEO of Microstrategy, a business intelligence firm, splurged on a $650 million bitcoin purchase by issuing debt, “a bold bet for any publicly traded company, especially for one whose business model does not even center on cryptocurrencies,” a CoinDesk writer opined, but Saylor “has brushed aside all criticism…