Phase Two of Institutional Bitcoin Adoption

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Tuesday, January 13, and today, we are entering phase two of institutional adoption. Before we get into that, however, if you're enjoying the show, please go subscribe to it, give it a rating, give it a review, or if you wanna dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly/breakdownpod. So far this year, markets have been a little directionless. We've seen a ton of big catalysts already, but bitcoin has largely been trading sideways. However, 2026 seems to be another big year for institutional adoption. The big headline was Morgan Stanley filing for a bitcoin ETF, signaling a desire to put wealth management clients into their own product. But we've also had dozens of minor headlines pointing in the same direction. In a recent note, Binance Research framed this year as the beginning of round two for institutional adoption. They viewed round one as the period where major financial institutions served solely as distribution channels. That era was marked by the launch of the Bitcoin ETFs, which allowed customers to get access, but didn't necessarily speak to a deeper strategy. For most of that era, the major investment banks had banned their advisors from putting clients in Bitcoin, so the sole focus was arms length distribution. That stance began to change late last year when we started seeing more interesting and diverse products being launched. Chief among them was JPMorgan's structured Bitcoin notes. These securities gave capped upside exposure to Bitcoin's price while providing some downside protection. The product signaled that sophisticated investors were looking for more control over how they include Bitcoin in a portfolio. Binance's note highlighted that Morgan Stanley has triggered an acceleration of the next phase of institutional adoption. They write, this front running behavior is expected to force competitors like Goldman Sachs and JPMorgan to follow suit to avoid falling behind in this emerging asset management lane. There are still a lot of boxes to check before Bitcoin becomes a fully mainstream asset class, but this year could be an inflection point. It feels as though we went through a phase shift towards the 2025, and we're now looking at round two of institutional adoption. Now if you are running through a checklist of necessary conditions for another wave of institutional adoption, there is a clear number one, passage of the market structure bill. The bill has now been in the works for years, and it's starting to get close. However, we've seen a string of fumbles and delays that are starting to put the entire bill at risk. On Monday, senator John Boozman announced that this week's markup hearing had been delayed until the end of the month. This is kind of a good news bad news …