"Institutional investors" are generally business majors who have a working, practical knowledge of money. They are diesel mechanics. Cryptocurrency is a fundamentally new store of value - institutional investors regard it much the same as diesel guys would regard fusion.
It is, nonetheless, a commodity and a very thinly traded one at that. The total market cap of all cryptocurrency has yet to eclipse Apple's cash-on-hand, for example.
Most people will form models in their heads to allow them to operate. As George Box said, "All models are wrong, some are useful." Modeling crypto as "goldbugging for nerds and criminals" works up to a point and many funds are diversifying into crypto because at this point if they do they're following the crowd but if they don't they're missing a gold rush. Better to be wrong together than right all alone.
Especially since a more refined model of cryptocurrency requires you to start from "what is money anyway" and nearly zero investors have the interest or expertise to entertain such navel-staring.