Institutions invest in all sorts of things without a fixed total supply. Equities, gold, and national currencies, for example.
Also, institutions buy things for lots of reasons besides hedging inflation. Arguably they're buying Bitcoin for the same reason they buy growth stocks.
https://freedom-to-tinker.com/2016/10/21/bitcoin-is-unstable...
If some future generation of bitcoiners is faced with either increasing the reward or putting up with frequent large rollbacks, we can't really predict which they'll choose.