The recent entry of Morgan Stanley into the US spot bitcoin ETF market has been seen by some as a catalyst for ending the current bear market, thanks to the vast distribution network of the company's $8 trillion wealth management division. However, Blockstream CEO Adam Back has cautioned that the process will be slower than anticipated. Back, an early contributor to the Bitcoin community, stated that while bitcoin ETFs are a significant development, institutional adoption is a gradual process that can take up to a year or even 18 months to materialize.
He emphasized that investors do not invest overnight and that a build-up of institutional investment will occur slowly, providing a tailwind for the market. Back also discussed the impact of regulatory influences, including the Trump administration's crypto-friendly stance, and the role of ETF providers such as BlackRock in defending their business interests.
Additionally, he touched on the cyclical nature of bitcoin's price, driven by the quadrennial halving event, and the potential for institutional flows to overwhelm sellers. Back also addressed concerns about quantum computing's potential to break Bitcoin's cryptography, stating that institutions are more systematic about risk and will consider even small tail risks, while retail investors may be less concerned about such distant possibilities.