The recent entry of Morgan Stanley into the US spot bitcoin ETF market has been seen by some as a catalyst to end the current crypto bear market, given the vast distribution network of the Wall Street wirehouse's $8 trillion advisory business. However, Blockstream CEO Adam Back believes that the process will take longer than anticipated. Back, an early contributor to the Bitcoin community, stated that while bitcoin ETFs are a crucial development for positive market signals, institutional adoption is a slow process. "I think what people may have miscalculated is that institutional adoption is very slow," Back said in an interview.
"So the ETFs got bought, but when BlackRock is saying they recommend 2% to 4% allocation in their general stock portfolio, the fund managers haven't done that yet. And they will, but it's slower than people anticipate." According to Back, investors do not invest overnight, and the build-up of investments can take up to a year or 18 months.
Back also discussed the impact of the US presidency on the crypto industry, noting that the current administration has introduced a new legislative framework for crypto and launched its own token shop. He believes that the establishment of bitcoin ETFs will transcend administrations and have a lasting impact on the industry. Back also touched on the cyclical nature of bitcoin's price, driven by the quadrennial halving event, and the potential for a price slide due to expected market trends. However, he noted that institutional flows, such as ETFs and sovereign investments, will eventually overwhelm sellers and drive the market forward.