The recent entry of Morgan Stanley into the US spot bitcoin ETF market, with its vast $8 trillion wealth management network, has been seen by some as a potential catalyst to end the current cryptocurrency bear market. However, Blockstream CEO Adam Back cautions that the process is slower than anticipated. Back, an early contributor to the Bitcoin community, believes that while bitcoin ETFs are a crucial development, institutional adoption takes time. "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 recommends a 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 is also the CEO and co-founder of BSTR, a bitcoin treasury company. The US presidency has introduced a new legislative framework for crypto, which has encouraged other jurisdictions to follow suit.

The UK's Financial Conduct Authority has approved ETFs for retirement accounts, and other countries are likely to do the same. While the current US administration is crypto-friendly, the established bitcoin ETFs have the power to transcend administrations.

BlackRock and other ETF providers will defend their business interests, applying a banking lobby to maintain the status quo. Another factor influencing bitcoin's price is its cyclical nature, driven by the quadrennial halving event. Even if this cycle is breaking, a price slide is still possible due to market expectations. However, institutional flows, such as ETFs and sovereign investments, are changing the market dynamics.

"They are growing their ability to buy bitcoin in different market conditions," Back said. "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." Back also addressed concerns about quantum computing's potential impact on Bitcoin's cryptography, stating that institutions are more systematic about risk and will consider even small tail risks.

"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. For retail investors, it sounds like something in the distant future that perhaps they’re not really worried about.

But institutions will think a decade ahead and ask, ‘Is this 1% risk? Is there an answer to it?’ They'll check stuff like that."