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 this process will take longer than expected. Back, an early contributor to the Bitcoin community, believes that while bitcoin ETFs are a significant development, institutional adoption is a slow process.
"I think what people may have miscalculated is that institutional adoption is very slow," he said 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." He notes that investors do not immediately invest, and a build-up could take a year or even 18 months. Back also points to the regulatory influence of the US presidency, citing the crypto-friendly term of President Donald Trump and the introduction of a new legislative framework for crypto. The establishment of bitcoin ETFs, however, has the power to transcend administrations. Another factor to consider is bitcoin's cyclical nature, driven by the quadrennial halving event, which often leads to a bull run followed by a bear market.
Back also addresses concerns about quantum computing's potential impact on Bitcoin's cryptography, stating that while institutions may be paying attention, the risk is still relatively small.