There's a new way for casual investors to get in on the cryptocurrency craze

Yoshikazu Tsuno | AFP | Getty Images

A member of a Bitcoin trading club posing with a Bitcoin medal at the club's meeting in Tokyo.

The 150 percent increase in bitcoin this year and 26-fold surge in the price of ethereum has attracted a whole new swath of investors to the cryptocurrency market.

Big institutions like endowments and pension funds are still on the sidelines as they try to assess how to approach this emerging asset class and, more importantly, whom to trust with their money.

But for wealthy individuals and family offices, there are exchange-traded funds and other types of listed funds popping up to offer some level of exposure.

Another type of fund — the special purpose vehicle — hit our radar on Friday.

An entity named i2 Storj SPV raised $2.4 million from a group of 30 investors, according to a filing with the SEC. The firm behind the vehicle is Iterative Instinct Management, a New York-based hedge fund that specializes in cryptocurrency and blockchain technology.

Iterative used the capital to invest in what's called an initial coin offering (ICO), a new way for crypto start-ups to raise money by selling tokens. In this case, the ICO came from a start-up named Storj, whose technology uses excess capacity on individual computers to create a cloud storage alternative to the services being provided by massive companies like Amazon and Microsoft.

Late last month, Storj raised $30 million in an ICO to invest in its network. Buyers of the tokens can use the digital currency to buy storage space or, as in the case of the SPV, they can hold the currency and hope for long-term price appreciation. Tokens were sold for 50 cents a piece and, as of Friday, they were trading at 66 cents.

"Our niche is small- to mid-cap alternative currencies," said Brandon Buchanan, co-founder of Iterative Instinct. "The market is growing at such an exponential rate that I do think there will be more funds that trickle into the space."

The most valuable currencies are bitcoin, with a total market value of $40 billion, followed by Ripple XRP at $30 billion and ethereum at $21 billion. Storj has $33.6 million in coins outstanding, making it the 53rd most valuable cryptocurrency, according to CoinMarketCap.

The dramatic rally of 2017 has driven many of the currencies into froth territory. But underpinning the growth is excitement around blockchain, a distributed electronic ledger that makes all transactions trackable.

The global blockchain technology market will grow 11-fold by 2021 to $2.3 billion from $210.2 million last year, according to research firm Market Reports Hub.

Still, Iterative Instinct's technology chief Chris Dannen said that his firm isn't likely to create many more SPVs for ICOs. Storj, he said, is the rare blockchain company that has user metrics that are alluring to a wider investor base.

Storj says it has 20,000 developers on the network, while most ICOs are for projects that have yet to get off the ground.

"They have a whole bunch of charts that go up and to the right," Dannen said. "That means real people are building real things."