Jefferies Analyst Warns Quantum Computing Could Compromise Bitcoin Cryptography

A Jefferies research note has prompted a significant shift in institutional sentiment toward bitcoin, as Christopher Wood, the firm’s global head of equity strategy, announced the removal of bitcoin from the firm’s long-term model portfolio. Wood’s decision is driven by growing concerns over the potential development of cryptographically relevant quantum computers (CRQCs), which, according to his analysis, could reduce the time required to derive a bitcoin private key from a public key from trillions of years to mere days.

In his note, Wood pointed to a ChainCode Labs report estimating that as many as 10 million bitcoins—equivalent to 50% of the total supply—could be vulnerable to a sufficiently powerful CRQC. Although such machines do not yet exist, the trajectory of quantum computing advancements has accelerated rapidly, prompting some in the crypto community to consider burning “vulnerable coins” to mitigate risk.

The model portfolio, which had allocated 5%–10% to bitcoin over the past five years, has been rebalanced: the bitcoin allocation was replaced entirely with gold and gold mining equities. The updated portfolio now comprises 45% physical gold, 25% gold mining stocks, and 30% Asian equities outside Japan. Wood argued that gold’s historical performance and geopolitical hedging qualities make it a more reliable store of value amid both mounting geopolitical tensions and the potential quantum threat.

Wood concluded that, while quantum risk may not disrupt bitcoin’s price trajectory in the short term, it represents a fundamental long-term vulnerability that could undermine bitcoin’s status as a store of value. The note underscores the need for the crypto community to address quantum resistance, whether through protocol upgrades, multisignature schemes, or other cryptographic innovations to safeguard against future quantum breakthroughs.