Crypto investment funds — also known as blockchain funds and digital asset funds — are rolling out at a rapid pace, according to an analysis from Crypto Fund Research.

Through July 31, 96 crypto hedge funds and venture capital funds had been launched this year, an annual pace of 165, which would surpass the record 156 launches in 2017.

“We expected a large number of new crypto funds to launch in 2018 to satisfy growing investor demand,” CFR’s founder, Josh Gnaizda, said in a statement. “However, the pace of new fund launches is a bit surprising given the dual headwinds of depressed prices [for cryptocurrencies] and less than favorable regulatory conditions in many regions.”

As investors await various regulators’ decisions on new investment vehicles, such as the Bitcoin ETF proposed by Van Eck and SolidX, crypto fund managers are setting up new funds and hoping to take advantage of what they perceive as unmet investor demand for crypto investments, according to CFR.

“While volatility in the crypto markets can attract some investors to sophisticated crypto funds,” Gnaizda said, “it remains unclear if the industry can support such a large number of funds, with limited track record, if we experience an extended bear market.”

The rapid pace of fund rollouts is only part of the story, according to CFR. Although crypto funds are the fastest-growing hedge fund strategy by number, overall assets are still quite minuscule.

Crypto funds collectively manage just $7.1 billion, much less than assets managed by some of the world’s biggest hedge funds. The overall hedge fund industry currently has $3.2 trillion under management, according to Hedge Fund Research.

CFR noted that most institutional investors remain on the sidelines, something many crypto fund managers hope will change in the coming months.

Crypto Funds at a Glance

At present, there are 466 crypto funds globally, according to CFR. Of these, 255 are set up as hedge funds and 196 as venture capital funds, with a smattering of exchange-traded and private equity funds.

Most funds are small, about half having less than $10 million in assets under management. Twenty-eight funds have more than $100 million in assets.

The U.S. claims the bulk of crypto funds, with 252 funds located there. China/Hong Kong, the U.K., Singapore, Switzerland, Canada, Germany and Australia also have a good number of these funds.

Cities with significant existing venture capital and hedge fund sectors are the top cities for crypto funds. In the U.S., those are San Francisco, dominant in venture capital, and New York, the world capital of hedge funds.

Of the 252 crypto funds in the U.S., only 84 are registered with the Securities and Exchange Commission. Most funds, being small, qualify as an exempt advisor and do not have to register.