As bitcoin continues its wild ride, a Singapore hedge fund unit is raising US$10 million (S$13.2 million) for a cryptocurrency arbitrage fund to trade off price movements.

Kit Trading, a unit of Vulpes Investment Management, said the fund is on track to close early next month.

Kit Trading is joining an increasingly crowded field as interest in digital currencies explodes globally. In an Oct 23 report, researcher Autonomous Next said 84 crypto hedge funds had opened last year, up from just 11 in 2016.

While institutional investors have mostly stayed on the sidelines, companies are launching everything from funds to regulated exchanges to crypto derivatives, trying to lure them in.

The wild swings in bitcoin and other digital currencies have sparked debate on whether they are the future of money or the latest investment bubble.

That is a discussion that Vulpes chief executive officer Stephen Diggle is not interested in. "We are agnostic," he said. "What we firmly believe in is arbitrage, and arbitrage opportunities abound in this nascent asset class."

Kit Trading was launched in 2016 and returned 17.2 per cent that year and 11.4 per cent the next.

Vulpes, founded by Mr Diggle in Singapore in 2011, has been investing in technology start-ups including PropertyGuru, South-east Asia's largest property portal.

It also invests in private equity, agriculture, real estate and life sciences.

BLOOMBERG