The approval of Bitcoin spot ETFs has significantly impacted traditional financial institutions' strategies in the crypto market. It lowers entry barriers, enabling institutions like hedge funds and pension funds to invest via regulated securities, boosting capital inflows—evidenced by $4.6 billion in trading volume on the first day of U.S. ETF approvals in 2024. Enhanced market liquidity and stability attract risk-averse investors, while encouraging regulatory frameworks globally, as seen in Hong Kong’s ETF initiatives. Major players like BlackRock are shifting from skepticism to active participation, launching ETFs and exploring custody services. However, challenges remain: market volatility, regulatory costs, and tensions between centralized products and crypto’s decentralized ethos could hinder progress. As institutions deepen involvement, crypto’s integration into global finance accelerates, though balancing innovation and compliance will shape the market’s future trajectory.