The recent participation of Morgan Stanley in the US spot bitcoin ETF market has been perceived by some as a catalyst that could potentially bring an end to the current bear market in the cryptocurrency space, given the vast distribution capabilities of the company's $8 trillion wealth management network. However, Adam Back, CEO of Blockstream and an early contributor to the Bitcoin community, cautions that the process will be slower than expected.
Back, who has been speculated to be the pseudonymous creator of Bitcoin, Satoshi Nakamoto, emphasizes that while bitcoin ETFs are a crucial development for positive market signals, their impact will not be immediate. In an interview, Back noted that institutional adoption is a gradual process, with fund managers taking time to adjust their portfolios. The build-up of investment could take up to a year or 18 months, according to Back. He also points out that the regulatory environment, particularly in the US, has become more favorable for the industry, with the current presidency introducing a new legislative framework for crypto and launching its own token shop.
This shift has encouraged other jurisdictions to follow suit. Back believes that the established bitcoin ETFs have the power to transcend administrations and that major financial institutions like BlackRock will defend their business interests in the bitcoin ETF market. Another factor influencing bitcoin's price is its cyclical nature, driven by the quadrennial halving event.
While some commentators think this cycle may be breaking, Back suggests that the logic of price movements will change only when people see strength in the market, which is now being driven by institutional flows. He also addresses concerns about quantum computing's potential to break Bitcoin's cryptography, stating that while institutions may be paying attention to this risk, it is not an immediate concern for the market.