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 massive distribution power of the company's $8 trillion wealth management network. However, Blockstream CEO Adam Back has cautioned that institutional adoption is a slow process.
Back, an early contributor to the Bitcoin community, stated that while bitcoin ETFs are a positive market signal, their impact will not be immediate. "I think what people may have miscalculated is that institutional adoption is very slow," Back said 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." Back believes that investors do not pile in overnight and that a build-up could take a year or even 18 months. He also pointed out that the regulatory influence of the US government, particularly the crypto-friendly presidency of Donald Trump, has improved the open-for-business framework in the US, encouraging other jurisdictions to follow suit. The establishment of bitcoin ETFs has the power to transcend administrations, with providers like BlackRock and Morgan Stanley likely to defend their business interests.
Back also discussed the cyclical nature of bitcoin's price, driven by the quadrennial halving event, and the potential impact of quantum computing on bitcoin's cryptography. While some commentators believe the four-year cycle is breaking, Back thinks that the logic of the market will only change when people see strength in the market, which is now coming in the form of institutional flows.