Recently, many people have been bombarded with messages like "Big institutions are aggressively buying BTC/ETH and locking their positions." When opening the market charts, the reality can be quite sobering—prices are not rising in a straight line as imagined, but instead oscillate within a certain range, occasionally experiencing sharp drops that scare traders. Many traders who have recently entered are caught in a dilemma: they fear getting trapped if they buy in, but also worry about missing out if they stay on the sidelines.

Today, let's clarify this issue: Are institutional lock-ups truly a market confidence booster, or just a seemingly gentle trap?

**What is Institutional Lock-up?**

Large institutions (including Grayscale, various ETF issuers, and traditional financial giants) purchase BTC or ETH and store them in dedicated custody accounts, setting a fixed lock-up period. During this time, these assets cannot be traded on the market. This is not a casual decision but a carefully strategic one.

**Core Logic Breakdown**

The essence of institutional lock-up is: reducing market circulation + signaling long-term confidence. However, these two factors have completely different impacts on short-term and long-term trends.

**Unexpected Short-term Performance**

Intuitively, people think: "Less circulating supply must lead to higher prices." But reality is more complex. Based on data from the past three institutional lock-up cycles, two of them initially experienced sideways oscillations in price, with one even dropping as much as 15%.

Why does this happen? Institutions typically do not build their positions all at once. They adopt a phased purchasing strategy, only announcing the lock-up after completing their accumulation. During this process, market expectations, technical pressures, and the exit of other funds all influence short-term prices. Simply assuming "lock-up equals rise" is a common reason many retail investors suffer losses.