The recent entry of Morgan Stanley into the US spot bitcoin ETF market has been seen by some as a catalyst for ending the current crypto bear market, given the vast distribution power of the company's $8 trillion wealth management network. However, Blockstream CEO Adam Back cautions that the process will be slower than anticipated. Back, an early contributor to the Bitcoin community, notes that while bitcoin ETFs are a significant development, institutional adoption is a gradual process. "I think what people may have miscalculated is that institutional adoption is very slow," he stated in an interview.
"The ETFs got bought, but when BlackRock recommends a 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." This build-up 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. The introduction of a new legislative framework for crypto and the launch of a token shop during President Donald Trump's term have contributed to this shift.
Additionally, the establishment of bitcoin ETFs has the potential to transcend administrations, with major financial institutions like BlackRock and Morgan Stanley likely to defend their business interests. Another factor to consider is bitcoin's cyclical nature, driven by the quadrennial halving event, which may lead to a bull run followed by a bear market.
Back also addresses concerns about quantum computing's potential impact on Bitcoin's cryptography, stating that while it may be a factor, institutions are more systematic about risk and will plan accordingly. Overall, Back believes that the influx of institutional funds, combined with the growing strength of the market, will eventually overwhelm sellers and drive up the price of bitcoin.