The recent participation of Morgan Stanley in the US spot bitcoin ETF market has been seen by some as a catalyst to end the current crypto bear market, given the vast distribution power of the company's $8 trillion wealth management network. However, Blockstream CEO Adam Back believes that the process will take longer than anticipated. Back, an early contributor to the Bitcoin community, stated 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," 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 also mentioned that investors do not make overnight decisions, and a build-up of investment could take up to a year or 18 months. He believes that the ETFs will have a positive impact on the market, but it will be a gradual process. The influence of regulatory bodies, such as the US government, also plays a role in the industry. Back noted that the current presidency has introduced a new legislative framework for crypto and has a more favorable stance towards the industry.

The establishment of bitcoin ETFs has the power to transcend administrations, with companies like BlackRock and Morgan Stanley defending their business interests. Another factor to consider is bitcoin's cyclical nature, driven by the quadrennial halving event.

Back stated that even if the four-year cycle is breaking, there is still a possibility of a price slide due to market expectations. However, institutional flows, such as ETFs and sovereign investments, are likely to change 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." Additionally, Back addressed concerns about quantum-computing hardware and its potential impact on Bitcoin's cryptography. While he believes that institutions are more systematic about risk and may be paying attention to the recent quantum doomsaying, he thinks that the impact is overstated.

"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."