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 has cautioned that this process will take longer than anticipated. Back, an early contributor to the Bitcoin community, believes that while bitcoin ETFs are a significant development, institutional adoption is a slow process. "I think what people may have miscalculated is that institutional adoption is very slow," he 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." He noted that investors do not make overnight decisions and that a build-up of investments could take up to a year or 18 months.
Back also discussed the impact of the US presidency on the crypto industry, stating that the current administration has introduced a new legislative framework for crypto and launched its own token shop. He believes that the establishment of bitcoin ETFs has the power to transcend administrations and that companies like BlackRock and Morgan Stanley will defend their business interests in the crypto market. Additionally, Back touched on 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 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.