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, given the vast distribution power of the company's $8 trillion wealth management network. However, Blockstream CEO Adam Back has cautioned that the process is slower than anticipated. Back, an early contributor to the Bitcoin community, noted that while bitcoin ETFs are a significant development, institutional adoption takes longer than most people realize. "I think what people may have miscalculated is that institutional adoption is very slow," Back said in an interview.
He added that investors do not invest overnight and that a build-up could take a year or even 18 months. Back also highlighted the importance of regulatory influence, citing the crypto-friendly stance of the current US presidency. The launch of a new legislative framework for crypto and the introduction of a token shop have indirectly encouraged other jurisdictions to follow suit. Back pointed out that the established bitcoin ETFs have the power to transcend administrations, whether Republican or Democrat.
Another factor to consider is bitcoin's cyclical nature, driven by the quadrennial halving event. Even if this cycle is breaking, there is still a possibility of a price slide due to market expectations. However, this logic is likely to change with the influx of institutional flows, such as ETFs, sovereign, and sovereign wealth fund investments. Back also addressed concerns about quantum computing's potential impact on Bitcoin's cryptography, stating that institutions are more systematic about risk and will consider even small tail risks.
While retail investors may not be worried about quantum technology, institutions will think ahead and seek answers to potential risks.