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 cryptocurrency 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 is slower than many people think. Back, an early contributor to the Bitcoin community, believes that while bitcoin ETFs are a crucial development for positive market signals, their impact will not be immediate. "I think what people may have miscalculated is that institutional adoption is very slow," he said in an interview with Coindesk, adding that investors do not invest overnight and that a build-up could take a year or even 18 months.
Founded in 2014 by Back and other prominent Bitcoin developers, Blockstream offers self-custody wallets, layer-2 network settlement, and asset issuance to retail and institutional clients. The company's CEO also co-founded BSTR, a bitcoin treasury company planning to go public via a SPAC merger. The US presidency has also played a role in boosting the industry, with the current administration introducing a new legislative framework for crypto and launching its own token shop.
This has encouraged other jurisdictions to follow suit, with the UK's FCA approving ETFs for retirement accounts. Back notes that the established bitcoin ETFs have the power to transcend administrations and that companies like BlackRock and Morgan Stanley will defend their business interests in the bitcoin market. 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.
Even if this cycle is breaking, the possibility of a price slide remains, but this logic may change as people see strength in the market, particularly with institutional flows and investors buying bitcoin directly. Quantum computing hardware has also been a topic of discussion, with some claiming it could break Bitcoin's cryptography, but Back believes this is not an immediate concern and that institutions are more systematic about risk, thinking a decade ahead.