Boston Red Sox left fielder Jason Bay stands in front of the scoreboard in the third inning against the Tampa Bay Rays in Game 5 of Major League Baseball's ALCS playoff series in Boston. Reuters/Brian Snyder The rapid rise of bitcoin, the red-hot cryptocurrency up more than 400% this year, has Wall Street abuzz.

Still, despite its meteoric rise, bitcoin by many measures is still in its very early days. Bitcoin and other cryptocurrencies are used, for instance, by a very small percentage of people and institutions are just starting to look at building out a sophisticated market around the space.

"We are in the third inning of a burgeoning new asset class," said BlockTower Capital cofounder Matthew Goetz in a recent interview with Business Insider.

Credit Suisse agrees with Goetz's thesis. In a note out to clients Tuesday, analysts Paul Condra and Mrinalini Bhutoria wrote "the investment infrastructure is emerging."

Cryptocurrency funds like BlockTower Capital have been opening at an eye-popping clip. At least 79 funds, according to Autonomous NEXT, a fintech analytics company, have emerged with an estimated $2 billion in managed assets. Michael Novogratz, a former manager at the $72 billion investor Fortress, for instance, is reportedly starting a $500 million crypto-fund that invests in bitcoin, ethereum, and other crypto-assets.

At the same time, "private investment firms are increasingly putting resources toward finding ways to provide exposure to the industry," according to Credit Suisse.

The Wall Street Journal reported that Goldman Sachs was looking into establishing a bitcoin trading operation. As for Credit Suisse, the bank hosted a symposium on cryptocurrencies and blockchain Tuesday.

There are barriers

Bitcoin's epic rise. MI But there are huge barriers to making cryptocurrencies more palpable to Wall Street, especially in the market for initial coin offerings, a cryptocurrency-based fundraising method.

This year companies have raised more than $2 billion via ICOs, but many have operated outside the realm of financial regulations. Some countries, including China and South Korea, have deemed them illegal. Such countries are worried about a mounting bubble in the space and the impact it could have on retail investors. Wall Street has similar concerns.

But a mature market could be around the corner. Overstock, the online retailer, launched a trading system that provides a platform on which startups can run ICOs in a manner compliant with the regulations of the Securities and Exchange Commission.

Credit Suisse said such initiatives could "catalyze more broad-based investment in the space."

"Regulation remains a key obstacle as – without a clear legal framework – existing service providers are generally unwilling to offer the liquidity, leverage and custody services needed to attract larger investment," the bank wrote.

This, however, will change over the course of the next five years, according to the bank. It expects SEC-compliant ICOs, which make up less than 1% of the total market, will soon become the norm.

What's less certain is which ICOs and cryptocurrencies will come out on top. Goetz told Business Insider that investing in ICOs and other crypto-assets is akin to betting on the internet during the nineties.

"You could be right on the thesis that cryptocurrencies are transformative and you could make what you think is the right bet at the time, but remember one time you had Yahoo and then this thing called Google came along," he concluded.

UBS in a note to clients Friday said the same thing: "Investing in the blockchain wave is akin to investing in the internet in the mid-nineties."

Many financial institutions, however, have shied away from the space.

In a recent interview with Bloomberg News, Larry Fink, the head of BlackRock, the world's largest investor with $5.7 trillion under management, said he thinks the explosive growth of bitcoin points to nefarious behavior.

"It just identifies how much money laundering there is being done in the world," Fink said. "How much people are trying to move currencies from one place to another."

JPMorgan CEO Jamie Dimon, more notably, called bitcoin a "fraud" at a Barclay's conference on September 12.