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 vast distribution power of the company's $8 trillion wealth management network. However, Blockstream CEO Adam Back cautions that the process is slower than most people think. Back notes that while bitcoin ETFs are a significant development, institutional adoption takes longer than anticipated. He estimates that a build-up of investment could take up to a year or 18 months.
According to Back, investors do not invest overnight, and the process is gradual. He also points out that the regulatory environment, including the US presidency's stance on crypto, plays a role in shaping 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 indirectly encouraged other jurisdictions to follow suit.
Back believes that the established bitcoin ETFs have the power to transcend administrations and that companies like BlackRock and Morgan Stanley will defend their business interests in the bitcoin ETF market. Another factor to consider is bitcoin's cyclical nature, driven by the quadrennial halving event, which can 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 institutions are more systematic about risk and will consider even small tail risks. Overall, Back remains optimistic about the future of bitcoin, citing the growing strength of institutional flows and the potential for overwhelming seller demand.