The recent arrival of Morgan Stanley in the US spot bitcoin ETF market has been seen by some as a catalyst to end the current crypto bear market, thanks to the massive distribution power of the company's $8 trillion wealth management network. However, Blockstream CEO Adam Back believes that the process of institutional adoption is much slower than anticipated.

In an interview with Coindesk, Back stated that while bitcoin ETFs are a significant development, it will take time for their impact to be felt. "I think what people may have miscalculated is that institutional adoption is very slow," he said.

"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 also pointed out that investors do not make decisions overnight, and a build-up of institutional investment could take up to a year or 18 months.

He believes that the ETFs will have a positive impact on the market, but it will be a gradual process. The Trump administration's crypto-friendly stance has also contributed to a more favorable regulatory environment, with the US introducing a new legislative framework for crypto and launching its own token shop. According to Back, this has encouraged other jurisdictions to follow suit, with the UK's FCA approving ETFs for retirement accounts.

The establishment of bitcoin ETFs has also given the industry new allies, including BlackRock, Morgan Stanley, and Fidelity, which will defend their business interests and lobby against interference. Another factor to consider is bitcoin's cyclical nature, driven by the quadrennial halving event, which cuts the supply of new tokens by 50%. While some commentators believe that the four-year cycle is breaking, Back thinks that the possibility of a price slide remains, simply because people expect it to happen.

However, he believes that institutional flows, such as ETFs, sovereign and sovereign wealth fund investments, and investors buying bitcoin directly or shares in bitcoin treasury companies, will eventually overwhelm the sellers. Additionally, Back addressed concerns about quantum-computing hardware progressing faster than expected and its potential impact on Bitcoin's cryptography.

He believes that while institutions may be paying attention to the risk, it is not a major concern for retail investors.