Christopher Wood, the longtime "Greed & Fear" strategist at investment bank Jefferies, has reportedly removed Bitcoin entirely from his flagship model portfolio. This decision stems from growing concerns that advancements in quantum computing could jeopardize the long-term security of the cryptocurrency.
According to a report by Bloomberg, Wood stated in the latest edition of his "Greed & Fear" newsletter that the 10% Bitcoin (BTC) allocation, which he initially introduced in late 2020, has been replaced by a diversified position in physical gold and gold mining stocks.
Wood's reasoning is that quantum breakthroughs would diminish Bitcoin's viability as a reliable store of value for investors seeking long-term, pension-style assets.
He further noted that concerns regarding quantum risk are increasingly prevalent among long-term, institutional investors. Wood warned that some capital allocators are now questioning Bitcoin's store of value proposition if the timeline for quantum advancements shortens.
Wood expressed apprehension that the arrival of "cryptographically relevant" quantum machines sooner than anticipated could enable attackers to derive private keys from exposed public keys. This would weaken the cryptography that secures Bitcoin balances and mining rewards, and in a worst-case scenario, challenge its status as "digital gold" for pension-style portfolios.
Quantum Risk Gains Traction in Mainstream Portfolios
While the quantum issue has been a subject of discussion among developers and commentators for years, Wood's action signifies its growing influence on mainstream asset allocation decisions made by major brokerage and research firms.
Nic Carter, a partner at Castle Island Ventures and a proponent of Bitcoin, has extensively addressed the quantum issue. In December, he cautioned that "capital is concerned and looking for a solution" regarding quantum risk. However, many developers, including Blockstream CEO Adam Back, remain skeptical about it being an immediate threat.
Macro analyst Luke Gromen has also adopted a more cautious stance on Bitcoin in recent months. He cites macro and technological uncertainties, including quantum computing risk, as reasons to favor increased gold exposure over BTC from a multi-cycle perspective.
Studies conducted by firms such as EY and PwC highlight quantum computing as a significant emerging threat to traditional public key cryptography. These reports warn that financial systems, including those supporting digital assets, must develop migration strategies to quantum-resistant alternatives.
Developers Believe Bitcoin Has Time to Adapt
Bitcoin developers and core infrastructure builders contend that the progress of quantum computing does not pose an immediate threat.
Adam Back, CEO of Blockstream, has repeatedly asserted that breaking Bitcoin's current signature schemes is likely two to four decades away. He argues that the network will have ample time to transition to post-quantum signature algorithms and implement improved key management practices well before any real-world breaches become feasible.
Other analysts, including a researcher from a16z, have concluded that the probability of a "cryptographically relevant" quantum computer capable of compromising today's public key systems emerging within this decade is low.
They suggest that more immediate risks arise from implementation bugs, governance issues, and "harvest now, decrypt later" attacks on encrypted data, rather than direct attacks on live blockchain signatures.