The recent entry of Morgan Stanley into the US spot bitcoin ETF market has sparked optimism among investors, with some predicting it could mark the end of the current crypto bear market. However, Blockstream CEO Adam Back cautions that institutional adoption is a slow process.
"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 notes that investors don't immediately pour in their funds, and a build-up could take up to a year or 18 months. The arrival of bitcoin ETFs is considered a significant development, potentially more influential than a pro-crypto US administration.
Founded in 2014, Blockstream offers self-custody wallets, layer-2 network settlement, and asset issuance to retail and institutional clients. The company's CEO, Adam Back, is also the CEO and co-founder of BSTR, a bitcoin treasury company.
The US presidency has introduced a new legislative framework for crypto, launching its own token shop and indirectly encouraging other jurisdictions to follow suit. The established bitcoin ETFs have the power to transcend administrations, with Black Rock and other ETF providers likely to defend their business interests. Another factor influencing bitcoin's price is its cyclical nature, driven by the quadrennial halving event.
Even if this cycle is breaking, there's still a possibility of a price slide due to market expectations. However, institutional flows, such as ETFs, sovereign investments, and direct bitcoin purchases, are likely to change this logic. Quantum-computing hardware advancements have also sparked concerns about their potential impact on Bitcoin's cryptography, but Back believes this is not an immediate concern for the market.