MicroStrategy is heavily invested in the Bitcoin network, not just in bitcoins. Even though I have like months to watch what's happening with MicroStrategy and the like, I remember very well Sailor being obsessed with bitcoin and lightning.
I believe the answer to your question is that most institutional investors prefer the convenience and regulatory oversight an ETF can provide.
Microstrategy and Michael Saylor are indeed fully into "Bitcoin". Institutional investors
generally are not buying Bitcoin they are more happy to have a certificate to say they own
Bitcoin leaving it up to the ETF provider to make the transaction of acquiring the actual Bitcoin.