Well the institutions aren't buying in large quantities compared to what THEY have. They are just buying in large quantities compared to what is normally bought in Bitcoin. They have enormously more money than the money than the entire market cap of bitcoin. Of the very small amount of institutions that have invested so far, most of them are going to be under 1% invested in Bitcoin so far, and the majority of the rest less than 5%. Places like Microstrategy are an outlier. For a pension or investment fund, putting 1% or a few % in the best growth asset in the world is a safe bet long term. If they are like buying futures contracts trying to guess what the price will be on a certain day, sure that's dumb, but now they are actually investing in Bitcoin, not just betting on its price, so that is safe for them.

And yeah, when it comes to Bitcoin, Warren Buffet's advice is completely worthless. He is very good at a specific type of investing and that is value investing of companies. He's not even good at valuing tech companies as he basically missed the first two decades of the tech boom, so he is an extremely poor judge when it comes to valuing Bitcoin. That said, his advice quoted above is "be brave when there is blood in the streets" is good advice in general, as anyone who bought at the bottom of the bear market knows. But using that quote to say Bitcoin is risky right now, ignores what we all know about bitcoin bull markets, and that is that they go tremendously higher than what we've seen these past few months, and we are still in the early stages of the current bull run.