Bitcoin’s use in funding startups via initial coin offerings are a major catalyst for the price surge in digital currencies this year.

Bitcoin, the digital currency, hit a record of $2,967 early Tuesday after having roughly tripled this year. Given bitcoin’s history of volatility, a tumble at some point seems inevitable. The currency’s backers don’t necessarily disagree. They just don’t care.

“This is probably the third or fourth bubble, if you want to call it that, in digital currency that we’ve gone through,” says Brian Armstrong, founder and chief executive of San Francisco-based bitcoin-services firm Coinbase, which supports bitcoin trading. Waves of demand for bitcoin tend to bring hype and volatility, but also new money, new ideas and new people to the unregulated currency and its offshoots. The result is that the world of cryptocurrencies is larger than it was before.

A stateless currency launched in 2009, bitcoin isn’t controlled by any one entity or government. Maintained by a decentralized network of computers, it is designed to quickly and cheaply match users with each other, sidestepping middlemen like banks.

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