The recent entry of Morgan Stanley into the US spot bitcoin ETF market has been viewed 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, according to Blockstream CEO Adam Back, this process will take longer than anticipated.
Back, an early contributor to the Bitcoin community and recently rumored to be the pseudonymous creator of Bitcoin, Satoshi Nakamoto, believes that while bitcoin ETFs are a crucial development for positive market signals, institutional adoption is a slow process. In an interview with Coindesk, Back stated that investors do not immediately pile into the market, and a build-up of investment can take up to a year or 18 months. He also noted that some of this investment is just beginning to happen and will occur slowly, creating a tailwind for the market. Back's company, Blockstream, founded in 2014, offers self-custody wallets, layer-2 network settlement, and asset issuance to retail and institutional clients.
He is also the CEO and co-founder of BSTR, a bitcoin treasury company planning to go public via a SPAC merger. The impact of government regulations on the crypto industry was also discussed, with Back suggesting that the current US presidency has created a more favorable environment for crypto business. The introduction of a new legislative framework for crypto and the launch of a token shop have indirectly encouraged other jurisdictions to follow suit.
Back believes that the established bitcoin ETFs have the power to transcend administrations and that companies like Black Rock and Morgan Stanley will defend their business interests in the bitcoin ETF. Another factor influencing bitcoin's price is its 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, with institutional flows, such as ETFs and sovereign investments, and investors buying bitcoin directly or shares in bitcoin treasury companies, the market is likely to see strength. Back also addressed concerns about quantum-computing hardware progressing faster than expected and its potential to break Bitcoin's cryptography, stating that while institutions may be paying attention to this risk, it is not a significant concern for the price of bitcoin.