The recent entry of Morgan Stanley into the US spot bitcoin ETF market has been seen by some as a catalyst for ending the current crypto bear market, given the vast distribution power of the company's $8 trillion wealth management network. However, Blockstream CEO Adam Back has cautioned that the process is slower than anticipated.
Back, an early contributor to the Bitcoin community, believes that while bitcoin ETFs are a significant positive market signal, even more important than a pro-crypto US administration, their impact will not be immediate. In an interview with Coindesk, Back stated that institutional adoption is a gradual process, and investors do not make overnight decisions. He predicts that a buildup of investment could take up to a year or 18 months.
Back also pointed out that the US presidency has created a more favorable environment for the crypto industry, with a new legislative framework and the launch of a token shop. The establishment of bitcoin ETFs has the power to transcend administrations and has gained the support of major financial institutions such as BlackRock, Morgan Stanley, and Fidelity. Another factor influencing bitcoin's price is its cyclical nature, driven by the quadrennial halving event, which reduces the supply of new tokens by 50%.
Back noted that even if this cycle is breaking, the expectation of a price slide can still occur due to market sentiment. However, with the influx of institutional flows, such as ETFs, sovereign investments, and direct bitcoin purchases, the market is likely to see strength and overwhelm sellers. Additionally, Back addressed concerns about quantum computing's potential to break Bitcoin's cryptography, stating that while it may be a factor, institutions are more systematic about risk and will consider even small tail risks. Overall, Back remains optimistic about the future of bitcoin, citing the growing support from institutional investors and the increasing adoption of the cryptocurrency.