The recent participation of Morgan Stanley in the US spot bitcoin ETF market has been viewed by some as a catalyst to end the current crypto bear market, given the vast distribution capabilities of the Wall Street wirehouse's $8 trillion wealth management network. However, Blockstream CEO Adam Back, an early contributor to the Bitcoin community, cautions that the process is slower than most people think. The introduction of bitcoin ETFs is a significant development, but it will take time for institutional adoption to materialize, with fund managers gradually allocating 2% to 4% of their portfolios to bitcoin. This build-up could take up to a year or 18 months, according to Back.
The regulatory environment, including the US presidency's crypto-friendly stance and the launch of its own token shop, has also improved, encouraging other jurisdictions to follow suit. Back notes that the established bitcoin ETFs have the power to transcend administrations and that institutions like BlackRock and Morgan Stanley will defend their business interests in the bitcoin market. Additionally, the cyclical nature of bitcoin's price, driven by the quadrennial halving event, and the potential impact of quantum computing on Bitcoin's cryptography are also factors to consider.
As institutional flows, such as ETFs and sovereign investments, grow, they are likely to overwhelm sellers and drive the market forward.