The recent participation of Morgan Stanley in the US spot bitcoin ETF market has been viewed by some as a pivotal moment that could potentially bring an end to the current cryptocurrency bear market, given the vast distribution capabilities of the company's $8 trillion wealth management network. However, Adam Back, CEO of Blockstream and a renowned figure in the early days of Bitcoin, cautions that the process will be more protracted than many expect. Back notes that while bitcoin ETFs represent a crucial development in terms of positive market signals, possibly even more significant than a pro-crypto US administration, the impact of institutional adoption will unfold gradually. In an interview with Coindesk, Back emphasized that the process of institutional investment is inherently slow, with fund managers requiring time to adjust their portfolios.
He suggests that the build-up of investment could take as long as a year or even 18 months to materialize. Back also points to the regulatory environment, highlighting the positive influence of the current US presidency on the cryptocurrency industry, including the introduction of a new legislative framework for crypto and the launch of a token shop. Nevertheless, he believes that the establishment of bitcoin ETFs, such as those offered by BlackRock and Morgan Stanley, will have a lasting impact that transcends political administrations, as these financial institutions will likely defend their interests in the bitcoin market.
Additionally, Back discusses the cyclical nature of bitcoin's price, driven by the quadrennial halving event, and the potential for a price slide due to market expectations. He also addresses concerns about quantum computing's potential to compromise Bitcoin's cryptography, suggesting that while institutions may take such risks into account, the impact on the price of bitcoin is likely to be minimal.