Institutional investors' interest in Bitcoin is growing day by day.

Although the price of Bitcoin has fallen by 52% from the historical high in 2017, institutional investors' enthusiasm for investing in it continues to rise. In 2020, three key factors drove institutional capital towards Bitcoin: the positive attitude of well-known investors, the increasing maturity of Bitcoin, and the strengthening fundamentals.

The asset management scale of the Grayscale Bitcoin Trust ( AUM ) is often regarded as an important indicator of institutional investor participation. When Bitcoin reached its all-time high in 2017, the trust's AUM reached $2.966 billion. As of June 23, 2020, this figure had exceeded $3.5 billion, nearly 20% higher than its historical peak.

It is worth noting that the proportion of institutional investors in Grayscale products has significantly increased. In the first half of 2018, institutional investors accounted for 56%, while by the first quarter of 2020, this figure had soared to 88%. This indicates that more and more institutional investors are entering the cryptocurrency market.

Recently, the attitudes of some major financial institutions towards Bitcoin have also changed. For example, a large investment bank that had previously been critical of Bitcoin has recently changed its stance, with its analysts stating that Bitcoin has "strong momentum." This investment bank has also opened bank accounts for some cryptocurrency exchanges, increasing its support for the crypto industry.

Some well-known investors have also begun to recognize Bitcoin's potential as a hedge against the inflation risk of fiat currency. For example, a billionaire investor revealed that he allocated 1% of his net worth to Bitcoin and stated that as Bitcoin's longevity increases, his confidence in it continues to grow.

The continuous development of the Bitcoin network has also earned it more trust. From June 2019 to June 2020, the hash rate of the Bitcoin network increased from 57 million TH/s to 105 million TH/s. Even after experiencing the third halving, Bitcoin's hash rate quickly recovered, demonstrating strong resilience.

Another trend worth noting is the decline in reserves of cryptocurrency exchanges, which suggests that retail investor trading activity may be decreasing. If this trend continues, it could lead to an increase in market share for exchanges focused on institutions, thereby altering the overall landscape of the cryptocurrency market.

However, not all financial institutions are optimistic about the long-term prospects of Bitcoin. A well-known investment bank stated during a client meeting that hedge funds trade cryptocurrencies mainly due to their high volatility, rather than viewing them as a viable long-term investment.

Overall, institutions and high-net-worth investors hold different views on the future development of Bitcoin. Some believe that Bitcoin will become a mature store of value and a reliable safe-haven asset, while others anticipate that its growth may be limited. In any case, if there are no fundamental changes in Bitcoin's fundamentals, long-term holding may be the strategy to maximize investment returns.