The recent entry of Morgan Stanley into the US spot bitcoin ETF market has been viewed by some as a catalyst to end the current crypto bear market, given the vast distribution capabilities of the company's $8 trillion wealth management network. However, Blockstream CEO Adam Back cautions that the process may be slower than expected. Back, an early contributor to the Bitcoin community, notes 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," he stated in an interview.

"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." The build-up of institutional investment could take up to a year or 18 months, according to Back.

Founded in 2014, Blockstream offers self-custody wallets, layer-2 network settlement, and asset issuance to retail and institutional clients. Back also serves as the CEO and co-founder of BSTR, a bitcoin treasury company. The impact of government regulations on the industry is also a consideration.

While the current US presidency has introduced a new legislative framework for crypto and launched its own token shop, the established bitcoin ETFs have the potential to transcend administrations. "One of the reasons to suppose the 'open for business' is going to stay, even as you get new administrations, is that now Black Rock and the other ETF providers are going to defend their business," Back said.

Another factor influencing bitcoin's price is its cyclical nature, driven by the quadrennial halving event. Even if this cycle is breaking, as some commentators believe, there is still the possibility of a price slide due to market expectations.

However, with the influx of institutional flows, such as ETFs and sovereign investments, the market may eventually see strength. "They are growing their ability to buy bitcoin in different market conditions," Back noted. "MicroStrategy, particularly, has been having an accelerated success with their Stretch kind of fixed-income product.

So they've been able to use that to buy a lot of bitcoin, and it's escalated even in the last few weeks. So those recurring buyers plus new institutional and wealth management buyers will eventually overwhelm the sellers." Additionally, Back addressed concerns about quantum-computing hardware and its potential impact on Bitcoin's cryptography. "People are trying to say it's a factor," he said. "But I think there's a lot of information asymmetry in these markets, meaning that things which you think are perfectly clear are confusing to some other people, and their uncertainty impacts their decisions." While institutions may be paying attention to the recent quantum doomsaying, Back believes it is essential to consider the systematic approach institutions take to risk.

"Institutions are more systematic about risk," he said. "So if there's a tail risk, even a small one, they want to know that it's covered."