### The last bull market was supposed to be Epic. It wasn’t. The new ATH (around USD68k) wasn’t even 4x the prior ATH (around USD19.5k). One of the biggest differences was the supposed institutional adoption. But, institutions answer to shareholders, and the buying/selling behavior is very different.

The mind blowing buying power of institutions has long been considered what will fuel the next major shift in crypto. But, the last bull market has showed us that it isn’t what we thought. We explore here some reasons why institutional adoption is a bit of a let down. 

1. Institutions answer to shareholders; 

No matter how much the leaders of an institution believe in bitcoin and crypto, they still answer to their [shareholders](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1391803).  For shareholder’s their primary concern is the stock price. Even if individual shareholders like bitcoin, they still will be unhappy if their share price is down. If shareholder’s are unhappy, they tend to sell-off. This creates a cycle wherein the leaders of the institution (board members/trustees/etc) will unlikely have diamond hands. It will work better for institutions to either have really small positions or be quick to sell. 

2.  Institutions are very concerned with short-term; 

Institutions are regulated and generally need to disclose information [quarterly](https://www.cfainstitute.org/en/advocacy/issues/impact-quarterly-reporting#sort=%40pubbrowsedate%20descending). It is thus, extremely important for institutions to be able to constantly show good things. In this framework, an increasing BTC portfolio isn’t yet accepted as a good thing. Success or failure of institutions are still measured in a FIAT bottom line. BTC volatility makes these quarterly reports a very problematic thing for institutions. The result is similar to the above. Institutions will insulate themselves from the volatility by taking small positions or being quick to sell. 

3. Institutions aren’t accustomed to large gains; 

Another thing about institutions is that a quick 2x or 3x almost never happens in their general history of investments. The expectations are really around 6%-11% gains per [year](https://www.schroders.com/en/insights/economics/investment-returns-of-6-or-11-whos-right/#:%20~:text=Institutional%20investors%20expect%20average%20annual,Investor%20Study%20published%20in%%2020July). So, if a cryptocurrency or digital asset jumps quickly to 4x the value of what an institution bought it for, there is a high likelihood of selling. This kind of mindset means that the very institutions that are expected to push crypto to new heights may actually temper the jumps in prices that we are accustomed to seeing in the bull markets. Simply put, they tend to sell early. This could be why the general expectation of BTC to break the USD100k price level in the last bull market didn’t happen. 

4. Institutions cannot stomach large losses; 

Large losses (even paper losses) cause heads to roll in [institutions](https://hbr.org/2002/12/holes-at-the-topwhy-ceo-firings-backfire). This disincentives the leaders of institutions from developing a ‘diamond hands’ mentality. There simply is no room for the kind of (paper) losses that BTC brings when there’s a bear market. This is very different from the retail investor who can simply decide to HODL through bear markets and focus on other things. 

5. Institutions want to buy cheap, and have resources to keep the prices low; 

The institutions that may have figured out the true potential of BTC have significant resources. Large institutions make the entire crypto market look like a tiny droplet. A single institution, Blackrock has over 10x the assets (10 Trillion US Dollars) of the entire crypto market (presently at around 1 Trillion US Dollars). That’s just one institution. The sheer scale of resources of institutions means that they can easily manipulate the price to where they are comfortable with it. If retail investors miss the train, the retail investor is forced to take the asset at a higher price; but if an institution ‘misses the train’, they bring it back. This ins’t necessarily a bad thing but for those that were expecting a larger bull run in 2020-2021, this institutional behavior may have messed up your profit taking plans. 

Our main takeaway is that institutions are not the silver bullet that retail was hoping for (yet). Our eyes right now are on [Microstrategy](https://buybitcoinworldwide.com/microstrategy-statistics/), the only known diamond hands institution with over 130,000 bitcoins (worth around 2.7B USD at the time of writing this article). We believe Mircostrategy will have a much coveted success story, and other institutions will have a basis and precedent to adopt the diamond hands mentality.

Will the institutions carry us to greater highs in the next bull market or will they ‘temper’ the price increase again? Let us know what you think in the comments! 

The last bull market was supposed to be Epic. It wasn’t. The new ATH (around USD68k) wasn’t even 4x the prior ATH (around USD19.5k). One of the biggest differences was the supposed institutional adoption. But, institutions answer to shareholders, and the buying/selling behavior is very different.

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