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 this process will take longer than anticipated. 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 slow process.
In an interview with Coindesk, he stated that fund managers have not yet allocated the recommended 2% to 4% of their portfolios to bitcoin, but this will happen gradually. According to Back, investors do not make overnight decisions, and a build-up of investment could take up to a year or 18 months. He also notes that the regulatory environment, particularly in the US, has improved with the introduction of a new legislative framework for crypto.
The presence of bitcoin ETFs, now supported by major institutions like BlackRock and Morgan Stanley, will help to maintain a favorable business environment regardless of administrative changes. Back also discussed the cyclical nature of bitcoin's price, driven by the quadrennial halving event, and the potential impact of quantum computing on the cryptocurrency's cryptography. While some commentators believe the four-year cycle may be breaking, Back thinks that institutional flows, such as ETFs and sovereign investments, will eventually overwhelm sellers and drive the market forward.