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 will be slower than expected. Back, an early contributor to the Bitcoin community and rumored to be the pseudonymous creator of Bitcoin, Satoshi Nakamoto, emphasizes that the ETFs are a crucial development for positive market signals, potentially more significant than a pro-crypto US administration.
Nevertheless, he notes that institutional adoption is a gradual process, often taking longer than anticipated. In an interview with Coindesk, Back explained that investors do not immediately invest in bitcoin, and a build-up of investment can take up to a year or 18 months.
He believes that a 'tailwind' is forming, with some developments just starting to unfold. Back is also the CEO and co-founder of BSTR, a bitcoin treasury company aiming to go public via a SPAC merger.
The impact of the Trump administration's crypto-friendly policies is also discussed, with Back suggesting that the current regulatory environment has encouraged other countries to adopt similar frameworks. The introduction of bitcoin ETFs has the potential to transcend administrations, with major providers like BlackRock and Morgan Stanley likely to 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 possibility of a price slide remains due to market expectations.
However, with institutional flows and investors buying bitcoin directly or through shares in bitcoin treasury companies, the market is likely to see strength. Back also addresses 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.