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 anticipated. Back, an early contributor to the Bitcoin community and rumored to be the pseudonymous creator of Bitcoin, Satoshi Nakamoto, believes that while bitcoin ETFs are a crucial development, their impact will not be immediate. Institutional adoption, he notes, is a gradual process that may take up to a year or 18 months to materialize.
Back's company, Blockstream, founded in 2014, offers self-custody wallets and other services to retail and institutional clients. He also co-founded BSTR, a bitcoin treasury company. The US presidency's stance on crypto has improved, with the current administration introducing a legislative framework and launching its own token shop.
This shift has encouraged other jurisdictions to follow suit, with the UK's FCA approving ETFs for retirement accounts. The establishment of bitcoin ETFs has given the industry new allies, including BlackRock and Morgan Stanley, which will likely defend their business interests. Another factor influencing bitcoin's price is its cyclical nature, driven by the quadrennial halving event.
While some commentators believe this cycle may be breaking, Back suggests that the price may still be affected by expectations of a slide. However, institutional flows, such as ETFs and sovereign investments, are likely to change this dynamic.
Quantum computing's potential to break Bitcoin's cryptography has also been a topic of discussion, but Back believes its impact is overstated. Institutions, being more systematic about risk, may consider this a tail risk, but it is unlikely to have a significant impact on the market.