Digital systems execute at speeds that governance systems cannot match. This paper develops the concept of "institutional latency," the structural friction between algorithmic velocity and the response capacity of the legal, normative, and organizational systems required to govern it. Drawing on institutional economics, including North's rules-norms distinction, Williamson's governance form selection logic, Ostrom's Institutional Analysis and Development framework, and Bromley's volitional pragmatism, I analyze Bitcoin as an institutional phenomenon whose governance architecture generates characteristic friction points. I draw on the ongoing 2024-26 Core v30/Knots dispute over OP_RETURN relay policy defaults to illustrate how that dispute is conducted entirely within the informal norm layer. I argue that institutional latency is durable at the informal norm layer, that permissionlessness is a specific configuration of boundary rules, not their absence, and that Bitcoin's political-level transactional attributes generate demand for deliberative governance the protocol cannot supply. The computational knowledge versus volitional knowledge distinction specifies the mechanism: as computational knowledge and technological development expand rapidly, the volitional questions they generate proliferate faster than governance capacity to address them. While I use a Bitcoin example, the framework is designed to travel to AI governance and algorithmic governance more broadly.