The big attraction to a crypto for hugely wealthy investors is that the finite amount of the crypto means its value cannot be inflationed-away.
Look at the flood of money into cryptos when the scale of the Covid pandemic became apparent. Governments around the world have brought in eye-popping levels of support, which has all got to be paid for. In reality, governments are not going to pay this back; they're going to 'print money' it down. That's going to have an inflationary effect, and inflation devalues fiat cash.
What I am saying is that finite-ness alone isn't the reason of the insane price increases. Most things in the world are finite. I can create a new crypto currency in a few hours that can have 10 times less tokens than Bitcoin, does that make my coin worth 10 times more than bitcoin?
Gold for example is the traditional inflation hedge, it is finite. Since last year prices of gold have gone from about 1600$/oz to 1900$/oz today. Bitcoin has gone from $6000 to $60000 and back down to $40,000 in the same time.
In fact as inflation has risen in past few months with the economy opening, bitcoin and most crypto prices have peaked and started declining.
What's driving the prices is supply and demand. And by supply I mean number of coins available for sale. When prices are rising no one wants to sell due to FOMO, more and more people want to buy because they see others making huge gains. Its a positive feedback loop. Once the prices start to drop it can easily turn into a negative feedback loop. Similar to what happened in 2017. We are already seeing that again.
Its pure speculation that determines the prices. Unlike with other assets like Stocks there are no fundamentals that matter at all. Don't get me wrong, stocks and other asset classes also go through their own speculative bubbles but with crypto it seems like that is all there to it.