“A veteran Wall Street analyst has pulled Bitcoin from his investment portfolio, highlighting rapid quantum computing advances that could shatter the cryptocurrency’s cryptographic foundations, potentially exposing up to half its supply to theft within years.”
A seasoned equity strategist at a major investment bank has issued a stark alert about the vulnerabilities in Bitcoin’s underlying technology. The analyst, who has long championed cryptocurrencies, recently liquidated his Bitcoin holdings, replacing them with traditional assets like gold amid growing concerns over quantum computing’s ability to undermine Bitcoin’s security protocols.
Bitcoin relies on elliptic curve digital signature algorithm (ECDSA) for securing transactions and ownership, alongside SHA-256 hashing for maintaining the blockchain’s integrity. These cryptographic methods have held strong against classical computers, but quantum machines leverage principles like superposition and entanglement to perform calculations at speeds unattainable by conventional systems. Specifically, algorithms such as Shor’s could factor large numbers exponentially faster, rendering ECDSA obsolete and allowing attackers to forge signatures or access private keys.
The strategist emphasized cryptographically relevant quantum computers (CRQCs), a class of quantum systems designed to target encryption. Research indicates these could emerge as early as the late 2020s, with some projections pushing the timeline to 2028. This shift in outlook stems from accelerated progress in quantum hardware, where error rates have dropped significantly, enabling more stable qubits—the building blocks of quantum processing.
Current Bitcoin market dynamics show resilience, with the asset trading around $95,300 per coin, reflecting a 0.2% daily uptick amid broader market volatility. However, the warning underscores potential downward pressure if quantum threats materialize unchecked. Analysts project that without upgrades, Bitcoin’s price could face corrections below $50,000 as investor confidence erodes.
Quantum Advancements Accelerating the Threat
In 2026, quantum computing is transitioning from experimental prototypes to deployable systems. Key developments include hybrid quantum-classical workflows, where quantum processors handle complex optimizations while classical computers manage routine tasks. Error correction techniques are maturing, with systems demonstrating exponential error suppression across larger qubit arrays. Neutral atom and photonic qubit technologies are gaining traction, potentially enabling room-temperature operations and reducing the need for extreme cooling.
Industry pilots in finance and pharmaceuticals are already testing quantum applications, signaling a path to commercial viability. For cryptocurrencies, this means heightened scrutiny: a third of Bitcoin’s supply sits in wallets with publicly visible cryptographic outputs, making them prime targets for quantum brute-force attacks.
Bitcoin’s Vulnerabilities and Potential Mitigations
Bitcoin’s decentralized nature complicates rapid upgrades, but the community is exploring quantum-resistant alternatives. Post-quantum cryptography, such as lattice-based or hash-based signatures, could fortify the network. Hard forks or layer-2 solutions might implement these without disrupting the core protocol.
Key Points on Market Implications
| Vulnerability | Description | Estimated Timeline | Potential Impact |
|---|---|---|---|
| ECDSA Key Cracking | Quantum algorithms like Shor’s could derive private keys from public addresses. | 2028-2035 | Up to 50% of Bitcoin supply at risk of theft. |
| SHA-256 Hash Breaking | Grover’s algorithm speeds up hash collisions, threatening blockchain integrity. | 2030s | Network-wide transaction reversals or forgeries. |
| Harvest-Now-Decrypt-Later Attacks | Adversaries collect encrypted data today for future quantum decryption. | Ongoing | Exposure of historical transactions and user privacy. |
| Wallet Exposure | Legacy addresses with reused public keys are most susceptible. | Immediate upon quantum breakthrough | Mass wallet draining, market panic. |
Investor Shift : Institutional players are diversifying away from pure crypto exposure, favoring assets immune to quantum risks like precious metals.
Regulatory Angle : Central banks are monitoring quantum threats, with studies warning of broader financial system disruptions if blockchains falter.
Innovation Race : Crypto projects are prioritizing quantum readiness, with some blockchains already integrating resistant algorithms to attract security-conscious users.
Price Volatility : While Bitcoin hovers near $95,000, quantum fears could amplify sell-offs during bearish cycles, testing support levels around $80,000.
Long-Term Outlook : Successful migration to quantum-safe tech could bolster Bitcoin’s resilience, positioning it as a evolved digital gold standard.
Disclaimer: This news report is for informational purposes only and does not constitute investment advice, tips, or endorsements. Sources are not mentioned.