Institutional investors bring more stability to the cryptocurrency market. Their large - scale, long - term investments can smooth out short - term price fluctuations. They are more likely to conduct in - depth research on projects, invest based on fundamental analysis, and have more diversified portfolios. In contrast, retail investors may be more influenced by short - term market sentiment and social media. The entry of institutional investors can also increase market liquidity. Their investment decisions, such as large - scale buying or selling of a particular cryptocurrency, can set market trends. For example, if a major institutional investor starts accumulating a cryptocurrency, it may signal to retail investors that the coin has potential, leading to more retail investment and price increases.