Institutional investors' large - scale capital inflows can drive up prices as their buying power is significant. Their outflows can also cause sharp price drops. Retail investors often follow the trend, and when they all rush to buy or sell based on market sentiment, it exacerbates volatility. In the long - term, a more diversified investor structure can bring more stability if institutional investors play a role in price discovery and long - term investment. However, if retail investors dominate with irrational behavior, it can still lead to high volatility. For example, during the Bitcoin bull run in 2021, institutional investment provided initial momentum, but retail participation later added to the volatility.