The recent entry of Morgan Stanley into the US spot bitcoin ETF market has been viewed by some as a catalyst for ending 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 will be slower than anticipated.
Back, an early contributor to the Bitcoin community, believes that while bitcoin ETFs are a significant development, institutional adoption is a gradual process. "I think what people may have miscalculated is that institutional adoption is very slow," Back stated in an interview. He notes that investors do not immediately invest, and a buildup of investment could take up to a year or 18 months. Back also highlights the importance of regulatory influence, citing the positive impact of the current US presidency on the crypto industry.
The introduction of a new legislative framework for crypto and the launch of a token shop have indirectly encouraged other jurisdictions to follow suit. According to Back, the established bitcoin ETFs have the power to transcend administrations, and the involvement of major players like Black Rock and Morgan Stanley will help defend the bitcoin business. Another factor to consider is bitcoin's cyclical nature, driven by the quadrennial halving event.
Back notes that even if the four-year cycle is breaking, there is still a possibility of a price slide due to market expectations. However, he believes that institutional flows, such as ETFs and sovereign investments, will eventually overwhelm sellers.
Back also addressed concerns about quantum computing's potential impact on Bitcoin's cryptography, stating that while institutions may be paying attention to the risk, it is not a significant concern at present.