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 cautions that the process may be slower than expected. Back, an early contributor to the Bitcoin community, believes that while bitcoin ETFs are a crucial development for positive market signals, institutional adoption is a gradual process. "I think what people may have miscalculated is that institutional adoption is very slow," Back said in an interview.
He notes that investors do not make decisions overnight and that a buildup of investment could take up to a year or 18 months. Back also points out that the regulatory environment, particularly in the US, has become more favorable for the crypto industry. The introduction of a new legislative framework for crypto and the launch of a token shop during the Trump presidency have contributed to this shift. Furthermore, the establishment of bitcoin ETFs has the potential to transcend administrations and defend the interests of the crypto business.
Another factor influencing bitcoin's price is its cyclical nature, driven by the quadrennial halving event. While some commentators believe this cycle may be breaking, Back suggests that the possibility of a price slide remains due to market expectations. However, he notes that institutional flows, such as those from ETFs, sovereign wealth funds, and investors buying bitcoin directly, will eventually overwhelm sellers.
Additionally, Back addresses concerns about quantum computing's potential impact on Bitcoin's cryptography, stating that while institutions may be paying attention to this risk, it is not a significant concern at present.