The recent entry of Morgan Stanley into the US spot bitcoin ETF market has been seen by some as a pivotal moment that could potentially mark the end of the current cryptocurrency bear market, given the vast distribution capabilities of the company's $8 trillion wealth management network. However, according to Blockstream CEO Adam Back, a pioneer in the Bitcoin community and recently speculated by the New York Times to be the pseudonymous creator of Bitcoin, Satoshi Nakamoto - a claim he denies - the impact may not be as immediate as anticipated.
Back emphasized 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 noted 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." The process of investors allocating funds takes time, potentially up to a year or more, before it manifests as a noticeable trend. Back also pointed out that the presence of institutional players like BlackRock in the bitcoin ETF space could provide a long-term positive influence on the market, acting as a counterbalance to regulatory changes with the shift in administrations.
Furthermore, the cyclical nature of bitcoin, influenced by the halving event, suggests that the market is due for a bull run, though the timing is uncertain. The entry of institutional investors, including those investing in bitcoin treasury companies, is expected to eventually outweigh sellers, driving the market forward.
Additionally, concerns about quantum computing's potential impact on bitcoin's cryptography are being monitored by institutions, which are more systematic about assessing and mitigating risks. Overall, while the entrance of institutional money into bitcoin is a positive signal, the effects will likely unfold gradually.