Alternative currency Bitcoin has seen a spectacular rise lately.

The digital, decentralized currency that first emerged in 2009 is now trading above $141. It was trading around $35 in early march.

Since there has been a great deal of chatter about the alternative currency, we were curious if any hedge funds were getting in on the action.

Last month, Forbes' contributor Jon Matonis first reported that Malta-based prime brokerage firm Exante launched the first Bitcoin hedge fund called the Bitcoin Fund. We couldn't find any from the U.S., though.

Part of being a hedge fund is having flexibility in what you invest in as long as it's disclosed in the operating documents. For instance, there are funds that buy houses, farmland and timber, so why not snap up a stake in Bitcoins?

We spoke to third party marketer Don Steinbrugge, managing partner of Richmond, Virginia-based Agecroft Partners, and he told us that he's not currently aware of any hedge funds in participating Bitcoins, but that doesn't mean they couldn't play it.

How To Play Bitcoin

Steinbrugge thinks there are two ways hedge funds could play this new currency.

The first way is that the funds could trade the currency, which would be something a macro manager or Commodity Trading Advisor (CTA) might do.

The second way hedge funds could participate would be in class shares.

"A lot of hedge funds have share classes of multiple currencies and, you know, there are issues with anyone's currency because long term you're kind of dependent on the federal reserve of that particular country. So I could definitely see long term people evolving share classes that they use. And if this new currency evolves and people view it as a better way to maintain value, I could see people evolving to use this too."

Hedge Funds Wouldn't Want A Big Stake

The issue right now is that the currency is fairly small, Steinbrugge explained.

There's currently only 11 million Bitcoins in existence giving it a market capitalization of just over $1.5 billion."

That's very small for a currency so hedge funds could participate, but you couldn't allocate a lot to it. It would be a very small percent of a global macro or CTA portfolio," Steinbrugge said.

Steinbrugge explained that a hedge fund is not going to want to represent a large percent of the shares outstanding. They probably wouldn't want more than 5%, he added.

Since the market cap is about $1.5 billion that would make 5% equal to $75,000,000. So if it's a $10 billion hedge fund that would be 0.75% of the portfolio, which is a very, very small percentage.

Just Now Getting Attention

Bitcoin, which has been around since 2009, has turned into a media freenzy lately, but that doesn't mean everyone is paying attention.

Business Insider had a conversation with a global macro futures trader recently who didn't really know much about Bitcoins. In fact, he had only heard of it in passing. So if we had to guess, there are probably people in the fund space that haven't caught on quite yet.

The currency is definitely attracting more attention, though. So far this week, we have seen two Wall Street analysts put out notes (here and here).

And as it attracts more attention, it will be an interesting space to watch.

"I think there's a lot of concern about policies of central banks and the impact it will have on currencies in the long term. I think having an alternative currency long term will be very interesting to the hedge fund industry," Steinbrugge said.

* If you are a hedge fund or know of a hedge fund who is investing in Bitcoins, please send an email to jlaroche@businessinsider.com. We will be discreet.