The recent entry of Morgan Stanley into the US spot bitcoin ETF market has been viewed 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, an early contributor to the Bitcoin community, cautions that the process is slower than many people think. The introduction of bitcoin ETFs could be a significant development for positive market signals, even more so than a pro-crypto US administration, but it will take time to materialize. Back notes that institutional adoption is a gradual process, and investors do not pour in overnight.
The build-up of investments could take up to a year or 18 months. He also points out that while ETFs may have a more significant impact on the industry than government regulations, there is still a regulatory influence at play. The current US presidency has introduced a new legislative framework for crypto and launched its own token shop, indirectly encouraging other jurisdictions to follow suit. The establishment of bitcoin ETFs has the power to transcend administrations, with major players like Black Rock and Morgan Stanley defending their business interests.
Another factor to consider is bitcoin's cyclical nature, driven by the quadrennial halving event, which may lead to a bull run followed by a bear market. The logic of price slides will only change when people see strength in the market, which is now coming in the form of institutional flows. Back also addresses concerns about quantum-computing hardware and its potential impact on Bitcoin's cryptography, stating that institutions are more systematic about risk and will consider even small tail risks.