Jefferies: Quantum Computing Could Steal Billions in Bitcoin Soon - Whalesbook
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Quantum Threat Emerges Jefferies, a prominent financial advisory firm, has issued a stark warning about the future of Bitcoin, identifying quantum computing as a significant existential threat. Global equity strategy head Christopher Wood detailed in the firm's "Greed & Fear" note how "cryptographically relevant quantum computers" (CRQCs) could fundamentally destabilize blockchain security. While traditional supercomputers would require trillions of years to break Bitcoin's encryption, a quantum machine could allegedly achieve this feat in mere hours or days. Bitcoin's Vulnerable Digital Keys The firm's analysis suggests that between 20% and 50% of all Bitcoin currently in circulation, representing an estimated 4 million to 10 million coins, is susceptible to theft. The most acute risks are associated with "Sathoshi-era" holdings and institutional addresses that have reused their public keys. Such address reuse exposes public keys to quantum-enabled discovery, potentially allowing malicious actors to seize digital assets.
Internal Debates Over Security This potential vulnerability has ignited fierce debate within the cryptocurrency community. Some proponents advocate for drastic measures like "burning" vulnerable coins to safeguard the network's integrity. However, these proposals face significant opposition, with critics arguing that such actions would be confiscatory and violate fundamental property rights.
Jefferies Shifts Investment Strategy In light of these long-term concerns, Jefferies announced it is removing its 10% Bitcoin allocation from its long-only pension portfolio. The firm is reallocating these funds equally into physical gold and gold-mining stocks. Gold is highlighted for its historical resilience and proven status as a stress-tested store of value. Bitcoin's Enduring Gains Despite the serious warnings regarding future technological threats, Jefferies acknowledged Bitcoin's substantial performance. The cryptocurrency has appreciated by 325% since the firm made its initial allocation in December 2020, underscoring its volatile yet significant return potential.