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, thanks to the vast distribution power of the company's $8 trillion wealth management network. However, Blockstream CEO Adam Back cautions that the process is slower than anticipated. Back, an early contributor to the Bitcoin community and rumored to be the pseudonymous creator of Bitcoin, Satoshi Nakamoto, believes that while bitcoin ETFs are a crucial development, institutional adoption takes time.

"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." Back notes that investors do not make overnight decisions and that a build-up of investment could take up to a year or 18 months. Founded in 2014, Blockstream offers self-custody wallets, layer-2 network settlement, and asset issuance to retail and institutional clients. The company's CEO also co-founded BSTR, a bitcoin treasury company.

The current US presidency has introduced a new legislative framework for crypto and launched its own token shop, creating a more favorable business environment. This shift has encouraged other countries to follow suit, such as the UK's FCA approving ETFs for retirement accounts. The established bitcoin ETFs have the power to transcend administrations, with providers like Black Rock and Morgan Stanley likely to defend their business interests. Another factor influencing bitcoin's price is its cyclical nature, driven by the quadrennial halving event.

Even if this cycle is breaking, a price slide could still occur due to market expectations. However, institutional flows, such as ETFs and sovereign investments, are changing the market dynamics.

"They are growing their ability to buy bitcoin in different market conditions," Back said. "MicroStrategy, particularly, has been having an accelerated success with their Stretch kind of fixed-income product. So they've been able to use that to buy a lot of bitcoin, and it's escalated even in the last few weeks.

So those recurring buyers plus new institutional and wealth management buyers will eventually overwhelm the sellers." Back also addressed concerns about quantum-computing hardware threatening Bitcoin's cryptography, stating that while it may be a factor, institutions are more systematic about risk and will consider even small tail risks. "Institutions are more systematic about risk," he said.

"So if there's a tail risk, even a small one, they want to know that it's covered. For retail investors, it sounds like something in the distant future that perhaps they’re not really worried about.

But institutions will think a decade ahead and ask, ‘Is this 1% risk? Is there an answer to it?’ They'll check stuff like that."